WALL'S CHINA SHOP Requirement a: Inventory Purchases Units Cost per Unit Cost Beginning Inventory First Purchase Second Purchase Total a.(1) Cost of Goods Sold and Ending Inventory Units Cost per Unit COGS FIFO - Cost of Goods Sold From Beginning Inventory From First Purchase From Second Purchase Total Ending Inventory Units Cost per Unit FIFO - Ending Inventory From Second Purchase a.(2) Cost of Goods Sold and Ending Inventory Cost per Unit Units COGS LIFO - Cost of Goods Sold From Second Purchase From First Purchase From Beginning Inventory Total Cost per Unit Ending Inventory Units LIFO - Ending Inventory From Beginning Inventory Total Ending Inventory a.(3) Cost of Goods Sold and Ending Inventory Weighted Average: Total Total Units Cost Cost per Unit Cost of Goods Sold Ending Inventory: Computation of Income Tax Expense and Net Income Weighted Average FIFO LIFO Sales Cost of Goods Sold Gross Margin Salaries Expense Income Before Tax Income Tax (25%) Net Income Requirement b: WALL'S CHINA SHOP Financial Statements For the Year Ended December 31, Year 3 FIFO LIFO Weight. Av. Income Statements Sales Cost of Goods Sold Gross Margin Salaries Expense Income Before Tax Income Tax Expense Net Income FIFO LIFO Weight. Av. Balance Sheets Assets Cash Merchandise Inventory Total Assets Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, Year 3 FIFO LIFO Weight Av. Cash Flows From Operating Activities.. Cash Inflow from Customers Cash Outflow for Inventory Cash Outflow for Salaries Expense Cash Outflow for Income Tax Net Cash Flow from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance WALL'S CHINA SHOP Balances at January 1, Year 3: Cash $ Beginning Inventory Common Stock Retained Earnings 80,100 33,000 50,000 63,100 Beginning Inventory: Number of units Cost per unit 220 150 $ Transactions in Year 3: First purchase (cash) Second purchase (cash) Sales (all cash) Salaries expense Income tax rate 150 units @ 160 units @ 410 units @ 38,000 25% A A A 155 160 320 $