Problem 5-19A (Algo) Effect of different inventory cost flow methods on financial statements LO 5-1 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 The following five transactions occurred in Year 2: 1. First purchase (cash): 125 units @ $90 2. Second purchase (cash): 200 units @ $98 3. Sales (all cash): 430 units @ $190 4. Paid $13,450 cash for salaries expenses 5. Paid cash for income tax at the rate of 40 percent of income before taxes $ 19,700 13,200 (150 units @ $88) 14,300 18,600 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. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. Complete this question by entering your answers in the tabs below. Req A Req B1 General Journal Req B1 T Accounts Req B2 General Journal Req B2 T Acccounts Req B3 General Journal Req B3 T Accounts Req C 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. (Round intermediate calculations to 3 decimal places.

Problem 5-19A (Algo) Effect of different inventory cost flow methods on financial statements LO 5-1 The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2. The following five transactions occurred in Year 2 : 1. First purchase (cash): 125 units @ $90 2. Second purchase (cash): 200 units a $98 3. Sales (all cash): 430 units a $190 4. Paid $13,450 cash for salaries expenses 5. Paid cash for income tax at the rate of 40 percent of income before taxes Required a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) UFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO. LIFO, and weighted average. Complete this question by entering your answers in the tabs below. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weigntedaverope cost flow. Compute the income tax expense for each method. (Round intermediate calculations to 3 decimal blaces