Problem 5-19B Effect of different inventory cost flow methods on financial statements The accounting records of Octavia's Flower Shop reflected the following balances as of January 1, Year 3: Cash Beginning inventory Common stock Retained earnings $92,500 36,000 (225 units a $1 60,000 68,500 The following five transactions occurred in Year 3 CHECK FIGURES a. Cost of Goods Sold FIFO: $58,325 b. Net Income LIFO: $18,340 1. First purchase (cash): 130 units $140 2. Second purchase (cash): 180 units $165 3. Sales (all cash): 380 units @ $335 4. Paid $42,000 cash for salaries expense 5. Paid cash for income tax at the rate of 30 percent of income before taxes