WALL'S CHINA SHOP Computation of Income Tax Expense and Net Income FIFO LIFO Weighted Average 0 0 0 0 0 0 $ 0 $ 0 $ 0 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, 100 33,000 (220 units @ $150) 50,000 63,100 The following five transactions occurred in Year 2: 1. First purchase (cash) 150 units a $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