Problem 5-32 Effect of different inventory cost flow methods on financial statements LO 5-6 CHECK FIGURES The accounting records of Wall's China Shop reflected the following balances as of January 1, 2018 Cost of Goods Sold FIFO: 62,650 Net Income LIFO: $22.012 Cash $80.100 33,000 (220 units 50,000 63,100 $150) Beginning inventory Common stock Retained earnings The following five transactions occurred in 2018: 1. First purchase (cash) 2. Second purchase (cash) 160 units $160 3. Sales (all cash) 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 150 units@ $155 410 units $320 flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Use a vertical model to show the 2018 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.)