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The accounting records of Wall's China Shop reflected the following balances as of January 1 , Year 2 . Cash $ 1 9 , 6

The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2.
Cash $ 19,600
Beginning inventory 13,600(160 units @ $85)
Common stock 15,100
Retained earnings 18,100
The following five transactions occurred in Year 2:
First purchase (cash): 115 units @ $87
Second purchase (cash): 195 units @ $95
Sales (all cash): 410 units @ $198
Paid $14,350 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 for each 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.

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