Question ( accounting)

Demonstration Problem 5-2 - Inventory Cost Flow Assumptions Crystal Apple Sales Company began 2010 with cash of $2,000, inventory of $3,600 (200 crystal apples that cost $18 each), S2,500 of common stock, and $3,100 of retained carnings The following events occurred during 2010 1. Crystal Apple purchased additional inventory twice during 2010. The first purchase consisted of 800 apples that cost S20 each, and the second consisted of 1,200 apples that cost $24 each. The purchases were on account 2. The company sold 2,040 apples for cash at a selling price of $40 cach 3. The company paid $44,800 cash on accounts payable for inventory purchases 4. Crystal Apple paid $26,000 cash for operating expenses Required a. Record the events in ledger T-accounts or using the horizontal financial statements model using the three different cost flow assumptions: FIFO, LIFO, and weighted aver- age b. Prepare an income statement, a balance sheet, and a statement of cash flows under each of the three cost flow assumptions