The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2: Cash Beginning inventory Common stock Retained earnings $19,200 17,600 (200 units @ $88) 15,000 21,800 The following five transactions occurred in Year 2: 1. First purchase (cash) 120 units @ $90 2. Second purchase (cash) 200 units $98 3. Sales (all cash) 350 units @ $190 4. Paid $15,150 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. b. Use a vertical model to show the Year 2 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 Cost of goods sold Ending inventory Weighted Average Sales WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 Cost of goods sold Gross margin Salaries expense Income before tax Income tax expenses Net income FIFO LIFO Weighted Average 0 0 0 Assets Cash Inventory Total assets Stockholders' equity Common stock Retained earnings WALL'S CHINA SHOP Balance Sheets As of December 31, Year 2 FIFO Weighted LIFO Average $ 0 $ 0 $ 0 Total stockholders' equity $ 0 $ 0 $ 0 WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities Cash inflow from customers Cash outflow for salaries expense Cash outflow for inventory Cash outflow for income tax Net cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance FIFO LIFO Weighted Average 0 0 0 0 0 0 $ 0 $ 0 $ 0