Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The accounting records of Walls China Shop reflected the following balances as of January 1, Year 3: Cash $ 17,400 Beginning inventory 18,060 (210 @

The accounting records of Walls China Shop reflected the following balances as of January 1, Year 3:

Cash $

17,400

Beginning inventory 18,060 (210 @ $86)
Common stock 16,000
Retained earnings

19,460

The following five transactions occurred in Year 3:

  1. First purchase (cash): 125 units @ $88
  2. Second purchase (cash): 200 units @ $96
  3. Sales (all cash): 365 units @ $194
  4. Paid $15,500 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. Compute the income tax expense for each method. b. Use a vertical model to show the Year 3 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.)

image text in transcribed

Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 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. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.) FIFO LIFO Weighted Average Cost of goods sold Ending inventory

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Research Methods For Accounting And Finance Global Management Series

Authors: Audrey Paterson, Kevin D. Ogorman, David Leung, Robert Macintosh, William Jackson

1st Edition

1910158895, 978-1910158890

More Books

Students also viewed these Accounting questions

Question

Explain the steps involved in training programmes.

Answered: 1 week ago