All information posted is correct. I just need help understanding B2 and B3.

The accounting records of Walls China Shop reflected the following balances as of January 1, Year 2:

Cash	$	17,500
Beginning inventory		17,835		(205 units @ $87)
Common stock		15,100
Retained earnings		20,235

The following five transactions occurred in Year 2:

First purchase (cash) 120 units @ $89

Second purchase (cash) 200 units @ $97

Sales (all cash) 355 units @ $195

Paid $14,450 cash for salaries expense

Paid cash for income tax at the rate of 25 percent of income before taxes

Required

Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow.

Use a vertical model to show the Year 2 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.)

Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weightedaverage cost flow. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.) Use a vertical model to show the Year 2 income statement under FIFO, LIFO, and weighted average. (Do not rounc intermediate calculations. Round your answers to nearest whole dollar amount.) Jse a vertical model to show the Year 2 balance sheet under FIFO, LIFO, and weighted average. (Do not round intermediate :alculations. Round your answers to nearest whole dollar amount.) Use a vertical model to show the Year 2 statement of cash flows under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount. Cash outflows should be indicated with a minus sign.)