Problem 5-19A 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 3: Cash Beginning inventory Common stock Retained earnings $16,700 18,920 (215 $88) 15,400 20,220 The following five transactions occurred in Year 3: 1. First purchase (cash): 120 units o $90 2. Second purchase (cash): 195 units @ $98 3. Sales (all cash): 365 units @ $195 4. Paid $13,550 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 flow. Compute the income tax expense for each method. b. Use a vertical model to show 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 preparing the statements.) Complete this question by entering your answers in the tabs below. Required A Required 31 Required B2 Required 33 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. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.) FIFO LIFO Weighted Average Cost of goods sold Ending inventory Required 31 > weighted average. (Hint: Record the events under an accounting equation before preparing the statements.) Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Use a vertical model to prepare the Year 3 income statement under FIFO, LIFO, and weighted average. (Do not roun intermediate calculations. Round your answers to nearest whole dollar amount.) WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 3 FIFO LIFO Weighted Averago + Salaries expense Income before tax Premi 8 of 8. Required A Required B1 Required B2 Required B3 Use a vertical model to prepare the Year 3 balance sheet under FIFO, LIFO, and weighted average. (Do non intermediate calculations. Round your answers to nearest whole dollar amount.) WALL'S WIINA SHOP Balance Sheets As of December 31, Year 3 FIFO LIFO Weighted Average Assets Total assets Stockholders' equity Total stockholders' equity 8 of