The accounting records of Wall's China Shop reflected the following balances as of

January $1,$ Year $2$:

The following five transactions occurred in Year $2$:

First purchase $($cash$)125$ units @ $$87$

Second purchase $($cash$)205$ units @ $$95$

Sales $($all cash$)375$ units @ $$200$

Paid $$14,750$ cash for salaries expense

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.

b$.$ Use a vertical model to show the Year $2$ 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.$)$The accounting records of Wall$$s China Shop reflected the following balances as of January $1,$ Year $2$:

Cash $

$17,000$

Beginning inventory $18,700(220$ units @ $$85)$

Common stock $15,200$

Retained earnings

$20,500$

The following five transactions occurred in Year $2$:

First purchase $($cash$)125$ units @ $$87$

Second purchase $($cash$)205$ units @ $$95$

Sales $($all cash$)375$ units @ $$200$

Paid $$14,750$ cash for salaries expense

Paid cash for income tax at the rate of $25$ percent of income before taxes

Required

Compute the cost of goods sold and ending inventory, assuming $(1)$ FIFO cost flow, $(2)$ LIFO cost flow, and $(3)$ weighted$-$average cost flow.

Use a vertical model to show the Year $2$ 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.$)$