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 @ $90 2. Second purchase (cash) 205 units @ $98 3. Sales (all cash) 350 units @ $197 4. Paid $13,950 cash for salaries expense 5. Paid cash for income tax at the rate of 25 percent of income before taxes $16,800 17,600 (200 units @ $88) 15,700 18,700 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. 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Sales Cost of goods sold Gross margin Salaries expense Income before tax Income tax expenses Net income Use a vertical model to show the Year 2 income statement under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.) Req B3 WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 FIFO LIFO 0 0 Weighted Average 0
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 @ $90 2. Second purchase (cash) 205 units @ $98 3. Sales (all cash) 350 units @ $197 4. Paid $13,950 cash for salaries expense 5. Paid cash for income tax at the rate of 25 percent of income before taxes $16,800 17,600 (200 units @ $88) 15,700 18,700 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. 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Sales Cost of goods sold Gross margin Salaries expense Income before tax Income tax expenses Net income Use a vertical model to show the Year 2 income statement under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.) Req B3 WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 FIFO LIFO 0 0 Weighted Average 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 @ $90
2. Second purchase (cash) 205 units @ $98
3. Sales (all cash) 350 units @ $197
4. Paid $13,950 cash for salaries expense
5. Paid cash for income tax at the rate of 25 percent of income before taxes
$16,800
17,600 (200 units @ $88)
15,700
18,700
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.
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.)
Complete this question by entering your answers in the tabs below.
Req A
Req B1
Req B2
Sales
Cost of goods sold
Gross margin
Salaries expense
Income before tax
Income tax expenses
Net income
Use a vertical model to show the Year 2 income statement under FIFO, LIFO, and weighted average. (Do not round
intermediate calculations. Round your answers to nearest whole dollar amount.)
Req B3
WALL'S CHINA SHOP
Income Statements
For the Year Ended December 31, Year 2
FIFO
LIFO
0
0
< Req A
Weighted
Average
0
Req B2 >
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 @ $90
2. Second purchase (cash) 205 units @ $98
3. Sales (all cash) 350 units @ $197
4. Paid $13,950 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 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.)
$16,800
17,600 (200 units @ $88)
15,700
18,700
Complete this question by entering your answers in the tabs below.
Req A
Req B1
Cost of goods sold
Ending inventory
FIFO
Req B2
Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-
average cost flow. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount.)
Req B3
LIFO
Weighted
Average
Req B1 >
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