5-19A (Algo) Effect of different inventory cost flow methods on financial statements LO 5-1 The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2. Cash Beginning inventory Common stock Retained earnings $ 18,700 (155 units @ 13,640 $88) 15,600 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C 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. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) FIFO LIFO Weighted average Cost of Goods Ending Inventory Sold WALL'S CHINA SHOP Computation of Income Tax Expense and Net Income FIFO LIFO Weighted Average 0 0 0 0 0 0 $ 0 $ 0 S Show less Beginning inventory Common stock Retained earnings 13,640 $88) 15,600 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C Record the above transactions in general journal form assuming FIFO cost flow. Assume perpetual inventory system is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet Show less 1 2 3456 Record first purchase of merchandise inventory for cash. Note: Enter debits before credits. Event 01 General Journal Debit Credit Record entry View general journal Clear entry > beginning Inventory Common stock Retained earnings ($88 ,13 15,600 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C Record the Year 2 transactions in T-accounts assuming FIFO cost flow. Assume perpetual inventory system is used. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) Cash Beg. Bal End. Bal Merchandise Inventory Beg. Bal End. Bal Common Stock Beg. Bal Retained Earnings Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold Beg. Bal Beg. Bal End. Bal End. Bal Salaries Expense Income Tax Expense Beg. Bal Beg. Bal End. Bal End. Bal Show less (155 units Beginning inventory 13,640 $88) Common stock 15,600 Retained earnings 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C Record the above transactions in general journal form assuming LIFO cost flow. Assume perpetual inventory system is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet Beginning inventory Common stock Retained earnings (155 units 13,640 $88) 15,600 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C Record the Year 2 transactions in T-accounts assuming LIFO cost flow. Assume perpetual inventory system is used. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) Cash Beg. Bal Merchandise Inventory Beg. Bal End. Bal End. Bal Common Stock Beg. Bal Retained Earnings Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold Beg. Bal Beg. Bal End. Bal End. Bal Salaries Expense Beg. Bal Income Tax Expense Beg. Bal End. Bal End. Bal Req B3 General Journal > Show less Common stock Retained earnings 15,600 16,740 The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units @ $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 420 units @ $189 4. Paid $13,800 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. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req C Record the Year 2 transactions in T-accounts assuming weighted-average cost flow. Assume perpetual inventory system is used. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.) Cash Beg. Bal End. Bal Merchandise Inventory Beg. Bal End. Bal Common Stock Beg. Bal Retained Earnings Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold Beg. Bal Beg. Bal End. Bal End. Bal Salaries Expense Beg. Bal Income Tax Expense Beg. Bal End. Bal End. Bal Show less CE Complete una questivi vy einemy your allweID III LIC LAND UCIUW. Req A Req B1 Req B1 T Req B2 Req B2 T Req B3 Req B3 T General Accounts General Acccounts General Accounts Req 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. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount. Amounts to be deducted and losses should be indicated with a minus sign.) WALL'S CHINA SHOP Income Statements For Year Ended December 31, Year 2 Show less Assets FIFO LIFO Weighted Average 0 0 0 0 S 0 $ 0 $ 0 WALL'S CHINA SHOP Balance Sheets As of December 31, Year 2 FIFO LIFO Weighted Average Total assets S 0 $ 0 $ 0 Stockholders' equity Total stockholders' equity S 0 $ 0 $ 01 WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: FIFO LIFO Weighted Average Net cash flows from operating 0 0 0 activities Cash flows from investing activities Cash flows from financing activities Net change in cash 0 0 0 Ending cash balance S 0 $ 0 $ 0