The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2:

Cash	$	19,000
Beginning inventory		15,040	(160 units @ $94)
Common stock		15,500
Retained earnings		18,540

The following five transactions occurred in Year 2:

1. First purchase (cash) 115 units @ $96
2. Second purchase (cash) 200 units @ $104
3. Sales (all cash) 420 units @ $187
4. Paid $14,500 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. (this part has been omitted) 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.

• Required A
• Required C

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. (Round intermediate calculations to 3 decimal places. Round your final answers to the nearest whole dollar amount.)

	Cost of Goods Sold	Ending Inventory
FIFO
LIFO
Weighted Average
WALL's CHINA SHOP
Computation of Income Tax Expense and Net Income
	FIFO	LIFO	Weighted Average

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.)

WALLs CHINA SHOP
Income Statements
	FIFO	LIFO	Weighted Average
WALL's CHINA SHOP
Balance Sheets
As of December 31, Year 2
	FIFO	LIFO	Weighted Average
Assets
Total assets
Stockholders' equity
Total stockholders' equity
WALL's CHINA SHOP
Statements of Cash Flows
For the Year Ended December 31, Year 2
	FIFO	LIFO	Weighted Average
Cash flows from operating activities
Net cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash
Ending cash balance