Problem 5-19A Effect of different inventory cost flow methods on financial statements The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 3: 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 3: 1. First purchase (cash): 150 units @ $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 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. Prepare the Year 3 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before prepar- ing the statements.)