The accounting records of Wall$$s China Shop reflected the following balances as of January $1,$ Year $2$:

Cash $

$16,500$

Beginning inventory $18,275(215$ units @ $$85)$

Common stock $14,600$

Retained earnings

$20,175$

The following five transactions occurred in Year $2$:

First purchase $($cash$)120$ units @ $$87$

Second purchase $($cash$)200$ units @ $$95$

Sales $($all cash$)365$ units @ $$200$

Paid $$13,700$ cash for salaries expense

Paid cash for income tax at the rate of $25$ percent of income before taxes

Required

Compute the cost of goods sold and ending inventory, assuming $(1)$ FIFO cost flow, $(2)$ LIFO cost flow, and $(3)$ weighted$-$average cost flow.

Use a vertical model to show the Year $2$ 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.$)$

Answer rating: 100% (QA)

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