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

Cash	$	16,600
Beginning inventory		19,065		(205 units @ $93)
Common stock		15,100
Retained earnings		20,565

The following five transactions occurred in Year 2:

First purchase (cash) 120 units @ $95

Second purchase (cash) 200 units @ $103

Sales (all cash) 355 units @ $190

Paid $16,350 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)

Step 16 Answer Requirement A FIFO LIFO Weighted Average Cost of goods sold 33555 35255 34530 Ending inventory 17510 15810 16535 Step 26 Working notes ... View the full answer