Cash Beginning inventory Common stock Retained earnings $16,800 18,690 (210 @ $89) 15,000 20,490 The following five transactions occurred in Year 3: 1. First purchase (cash): 120 units @ $91 2. Second purchase (cash): 200 units @ $99 3. Sales (all cash): 360 units @ $187 4. Paid $15,550 cash for salaries expense 5. Paid cash for income tax at the rate of 25 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. Use a vertical model to show the Year 3 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.) FIFO LIFO Weighted Average Cost of goods sold Ending inventory WALLIS CHINA SHOP Income Statements For the Year Ended December 31, Year 3 FIFO LIFO Weighted Average Salaries expense Income before tax WALL'S CHINA SHOP Balance Sheets As of December 31, Year 3 FIFO LIFO Weighted Average ssets otal assets tockholders' equity Fotal stockholders' equity WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, Year 3 FIFO LIFO Weighted Average Cash flows from operating activities Net cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance