Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the shirt shop had the following transactions for

The Shirt Shop had the following transactions for T-shirts for2018, its first year of...

Free

60.1K

Verified Solution

Question

Accounting

The Shirt Shop had the following transactions for T-shirts for2018, its first year of operations:

Jan. 20 Purchased 420 units @ $ 9 = $ 3,780

Apr. 21 Purchased 150 units @ $ 10 = 1,500

July 25 Purchased 230 units @ $ 12 = 2,760

Sept. 19 Purchased 80 units @ $ 13 = 1,040

During the year, The Shirt Shop sold 730 T-shirts for $18 each.Compute the difference in GROSS MARGIN between the FIFO and LIFOcost flow assumptions

Answer & Explanation Solved by verified expert
3.7 Ratings (651 Votes)

Sales revenue = 730 T shirts X $18
$ 13,140
As per FIFO Cost of Goods sold
Jan-20 Purchased 420 $             9 $       3,780 420 $             9 $    3,780
Apr-21 Purchased 150 $           10 $       1,500 150 $          10 $    1,500
Jul-25 Purchased 230 $           12 $       2,760 160 $          12 $    1,920
Sep-16 Purchased 80 $           13 $       1,040 0 $          13 $           -  
Total $       9,080 730 $    7,200
Gross Margin = Sales revenue - cost of goods sold
= $13,140 - $7,200
= $    5,940
As per LIFO Cost of Goods sold
Jan-20 Purchased 420 $             9 $       3,780 270 $             9 $    2,430
Apr-21 Purchased 150 $           10 $       1,500 150 $          10 $    1,500
Jul-25 Purchased 230 $           12 $       2,760 230 $          12 $    2,760
Sep-16 Purchased 80 $           13 $       1,040 80 $          13 $    1,040
Total $       9,080 730 $    7,730
Gross Margin = Sales revenue - cost of goods sold
= $13,140 - $7,730
= $    5,410
Difference in Gross margin = Gross margin as per FIFO - Gross margin as per LIFO
= $5,940 - $5,410
= $ 530

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

In: AccountingThe Shirt Shop had the following transactions for T-shirts for2018, its first year of operations:...The Shirt Shop had the following transactions for T-shirts for2018, its first year of operations:Jan. 20 Purchased 420 units @ $ 9 = $ 3,780Apr. 21 Purchased 150 units @ $ 10 = 1,500July 25 Purchased 230 units @ $ 12 = 2,760Sept. 19 Purchased 80 units @ $ 13 = 1,040During the year, The Shirt Shop sold 730 T-shirts for $18 each.Compute the difference in GROSS MARGIN between the FIFO and LIFOcost flow assumptions

Other questions asked by students

Q

Find all solutions of the equation 2sinx - cos x =1in the interval [0, 2?)...

Calculus
Q

Starbucks Company’s payroll register contained the followinginformation:Sales salaries expense……………………….$300,000Federal income taxespayable………………    60,000Social...Starbucks Company’s payroll register...

Accounting
Q

Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...

Finance
Q

cisplatin(or cis- diamminedichloroplatinum(II) is an anticancer drug. The trans isomer, however has no effect. how does...

Chemistry
Q

Elaborate on the braking system performance relation with braking frequency. Use graphs.

Mechanical Engineering
Q

Calendars imprints calendars with college names. The company has fixed expenses of $ 1 comma 065 comma...

General Management
Q

C 0 00 0 21 A B RNA ANNAR Speed 1x DNA is being transcribed...

Biology
Q

Solve the given equation Enter your answers as a comma separated list Let k be...

Calculus
Q

The figure below shows a human heart at rest During intense exercise the human heart...

Algebra
Q

need help with 46-50 please. will thumbs up 45. The term capilal...

Accounting
Q

Based upon the following data, which of the following mutually exclusive projects should you choose...

Accounting
Q

Hazel wants to invest a sum of money today that will yield $10,000 at the...

Accounting