Question
The accounting records of Walls China Shop reflected the following balances as of January 1, Year 3: Cash $ 17,200 Beginning inventory 19,135 (215 @
The accounting records of Walls China Shop reflected the following balances as of January 1, Year 3: Cash $ 17,200 Beginning inventory 19,135 (215 @ $89) Common stock 14,700 Retained earnings 21,635 The following five transactions occurred in Year 3: First purchase (cash): 125 units @ $91 Second purchase (cash): 200 units @ $99 Sales (all cash): 370 units @ $187 Paid $15,050 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. Compute the income tax expense for each method.
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