The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2: Cash $18,200 Beginning inventory 18,270 (210 units @ $87) Common stock 14,600 Retained earnings 21,870 The following five transactions occurred in Year 2: 1. First purchase (cash) 120 units @ $89 2. Second purchase (cash) 195 units @ $97 3. Sales (all cash) 360 units @ $197 4. Paid $15,200 cash for salaries expense 5. Paid cash for income tax at the rate of 25 percent of income before taxes