Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The accounting records of Wall's China Shop refiected the following balances as of January 1 , Year 2 . The following five transactions occurred in
The accounting records of Wall's China Shop refiected the following balances as of January 1 , Year 2 . The following five transactions occurred in Year 2: 1. First purchase (cash): 120 units $93 2. Second purchase (cash): 195 units $101 3. Sales (all cash): 425 units $191 4. Paid $13,300 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, ant statement of cash flows under FIFO, LIFO, and weighted average. Complete this question by entering your answers in the tabs below. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) UFO cost flow, and (3) weightedaverage 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,)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started