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The accounting records of Wall's China Shop reflected the following balances as of January 1, 2018: $19,800 Cash Beginning inventory Common stock 18,900 (210 units
The accounting records of Wall's China Shop reflected the following balances as of January 1, 2018: $19,800 Cash Beginning inventory Common stock 18,900 (210 units @ $90) 15,700 23,000 Retained earnings The following five transactions occurred in 2018: 1. First purchase (cash) 120 units @ $92 2. Second purchase (cash) 195 units @ $100 3. Sales (all cash) 360 units @ $200 4. Paid $14,550 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. Use a vertical model to show the 2018 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.) Req B2 Req A Req B1 Req B3 Use a vertical model to prepare the 2018 statement of cash flows under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.) WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, 2018 Weighted Average FIFO LIFO Cash flows from operating activities Net cash flows from operating activities 0 0 0 Cash flows from investing activities Cash flows from financing activities Net change in cash 0 C 0 $ 0 Ending cash balance
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