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 $80,
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 $80, 10e 33,890 (220 units @ $150) 50, eee 63,100 The following five transactions occurred in Year 2: 1. First purchase (cash) 150 units @ $155 2. Second purchase (cash) 160 units @ $160 3. Sales (all cash): 410 units @ $320 4. Paid $38.000 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. Record the above transactions in general journal form and post to T-accounts assuming (1) FIFO cost flow. (2) LIFO cost flow, and (3) weighted average cost flow. 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. Complete this question by entering your answers in the tabs below. Required A Required BG] FIFO Required BT Acc FIFO Required B G Required BT Required BG] Required BT LIFO Acc LIFO WA Acc WA Required Record the above transactions in general journal form assuming LIFO cost flow. Assume perpetual inventory system is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
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