Required a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average.
Required a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2. LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2.
Cash
Beginning inventory
Common stock
Retained earnings
The following five transactions occurred in Year 2:
1. First purchase (cash): 120 units @ $91
2. Second purchase (cash): 195 units @ $99
3. Sales (all cash): 420 units @ $199
4. Paid $16,950 cash for salaries expenses
5. Paid cash for income tax at the rate of 40 percent of income before taxes
Required
a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost
flow. Compute the income tax expense for each method.
b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume
perpetual inventory system is used.
1. FIFO
2. LIFO
3. Weighted Average
c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and
weighted average.
Complete this question by entering your answers in the tabs below.
Req A
$ 18,900
13,795 (155 units @ $89)
15,900
16,795
Req B1
General
Journal
FIFO
LIFO
Weighted average
Req B1 T
Accounts
$
Req B2
General
Journal
Cost of Goods
Sold
$
Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-
average cost flow. Compute the income tax expense for each method. (Round intermediate calculations to 3 decimal places.
Round your final answers to the nearest whole dollar amount.)
24,715
WALL'S CHINA SHOP
Computation of Income Tax Expense and Net Income
FIFO
LIFO
0
Req B2 T
Acccounts
0
0 $
Ending
Inventory
0
0
0
Req B3
General
Journal
Weighted
Average
$
0
0
Req B3 T
Accounts
0
Req C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa907acaf-9892-45fc-9e17-791a7c525f26%2F237e0d6c-19d7-422b-ba09-f6661d2671f6%2Fycoecma_processed.png&w=3840&q=75)
Transcribed Image Text:The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2.
Cash
Beginning inventory
Common stock
Retained earnings
The following five transactions occurred in Year 2:
1. First purchase (cash): 120 units @ $91
2. Second purchase (cash): 195 units @ $99
3. Sales (all cash): 420 units @ $199
4. Paid $16,950 cash for salaries expenses
5. Paid cash for income tax at the rate of 40 percent of income before taxes
Required
a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost
flow. Compute the income tax expense for each method.
b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume
perpetual inventory system is used.
1. FIFO
2. LIFO
3. Weighted Average
c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and
weighted average.
Complete this question by entering your answers in the tabs below.
Req A
$ 18,900
13,795 (155 units @ $89)
15,900
16,795
Req B1
General
Journal
FIFO
LIFO
Weighted average
Req B1 T
Accounts
$
Req B2
General
Journal
Cost of Goods
Sold
$
Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-
average cost flow. Compute the income tax expense for each method. (Round intermediate calculations to 3 decimal places.
Round your final answers to the nearest whole dollar amount.)
24,715
WALL'S CHINA SHOP
Computation of Income Tax Expense and Net Income
FIFO
LIFO
0
Req B2 T
Acccounts
0
0 $
Ending
Inventory
0
0
0
Req B3
General
Journal
Weighted
Average
$
0
0
Req B3 T
Accounts
0
Req C
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