Cash Beginning inventory Common stock Retained earnings $17, 600 17,630 (205 units 586) 15,600 19,630 The following five transactions occurred in Year 2 1. First purchase (cash) 120 units @ s88 2 Second purchase (cash) 195 units @ $96 3. Sales (all cash) 355 units $200 4. Paid $15,300 cash for salaries expense 5 Paid cash for income tax at the rate of 25 percent of income before taxes Required o. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow b. 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)

Cash Beginning inventory Common stock Retained earnings $17, 600 17,630 (205 units 586) 15,600 19,630 The following five transactions occurred in Year 2 1. First purchase (cash) 120 units @ s88 2 Second purchase (cash) 195 units @ $96 3. Sales (all cash) 355 units $200 4. Paid $15,300 cash for salaries expense 5 Paid cash for income tax at the rate of 25 percent of income before taxes Required o. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow b. 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)

Name: Cash$17,60017,630 (205 units @ $86)Beginning inventoryCommon stockRet
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Description: Cash$17,60017,630 (205 units @ $86)Beginning inventoryCommon stockRetained earnings15,60019,630The following five transactions occurred in Year 2:1. First purchase (cash) 120 units @ s882 Second purchase (cash) 195 units o $963. Sales (all cash) 355

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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