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The accounting records of Wall s China Shop reflected the following balances as of January 1 , Year 3 : Cash $ 1 7 ,

The accounting records of Walls China Shop reflected the following balances as of January 1, Year 3:
Cash $
17,600
Beginning inventory 18,705(215 @ $87)
Common stock 14,900
Retained earnings
21,405
The following five transactions occurred in Year 3:
First purchase (cash): 115 units @ $89
Second purchase (cash): 200 units @ $97
Sales (all cash): 360 units @ $189
Paid $16,400 cash for salaries expense
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-1. Use a vertical model to show the Year 3 income statement under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)
b-2. Use a vertical model to show the Year 3 balance sheet under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)
b-3. Use a vertical model to show the Year 3 statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)

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