Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $
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 $ 19,000 14,880 (160 units @ $93) 14,100 19,780 The following five transactions occurred in Year 2: 1. First purchase (cash): 125 units @ $95 2. Second purchase (cash): 200 units @ $103 3. Sales (all cash): 435 units @ $185 4. Paid $16,250 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. 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. qwers in the tabs below.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started