The accounting records of Wall's China Shop reflected the following balances as of January 1, Year...
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The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2. Cash Beginning inventory Common stock $ 18,300 14,105 (155 units @ $91) 14,400 Retained earnings 18,005 The following five transactions occurred in Year 2:1 1. First purchase (cash): 115 units @ $93 2. First purchase (cash); 115:00 units 3 2. Second purchase (cash): 200 units @ $101 3. Sales (all cash): 415 units @ $193 4. Paid $16,400 cash for salaries expenses 5. Paid cash for income tax at the rate of 40 percent of income before taxes Required a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2. Cash Beginning inventory Common stock $ 18,300 14,105 (155 units @ $91) 14,400 Retained earnings 18,005 The following five transactions occurred in Year 2:1 1. First purchase (cash): 115 units @ $93 2. First purchase (cash); 115:00 units 3 2. Second purchase (cash): 200 units @ $101 3. Sales (all cash): 415 units @ $193 4. Paid $16,400 cash for salaries expenses 5. Paid cash for income tax at the rate of 40 percent of income before taxes Required a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average.
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Survey of Accounting
ISBN: 978-1259631122
5th edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay
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