Question
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2. Cash $ 16,900 Beginning inventory 13,650 (150 units
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2.
Cash $ 16,900
Beginning inventory 13,650 (150 units @ $91)
Common stock 14,900
Retained earnings 15,650
The following five transactions occurred in Year 2:
First purchase (cash): 115 units @ $93
Second purchase (cash): 195 units @ $101
Sales (all cash): 420 units @ $189
Paid $13,600 cash for salaries expenses
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 foreach 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.
Record the Year 2 transactions in T-accounts assumingFIFO 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.)
Record theabove 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.)
Record the Year 2 transactions in T-accounts assumingLIFO 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.)
Record theabove transactions in general journal form assuming weighted-average 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.)
Record the Year 2 transactions in T-accounts assumingweighted-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.)
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.)
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