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 $16,200 19,475 (205 units @ $95) 15,000 20,675 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $97 2. Second purchase (cash) 195 units @ $105 3. Sales (all cash) 360 units @ $185 4. Paid $13,750 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 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.) FIFO LIFO Weighted Average Cost of goods sold Ending inventory Req A Req B1>
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 $16,200 19,475 (205 units @ $95) 15,000 20,675 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $97 2. Second purchase (cash) 195 units @ $105 3. Sales (all cash) 360 units @ $185 4. Paid $13,750 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 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.) FIFO LIFO Weighted Average Cost of goods sold Ending inventory Req A Req B1>
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$16,200
19,475 (205 units @ $95)
15,000
20,675
The following five transactions occurred in Year 2:
1. First purchase (cash) 125 units @ $97
2. Second purchase (cash) 195 units @ $105
3. Sales (all cash) 360 units @ $185
4. Paid $13,750 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.)
Complete this question by entering your answers in the tabs below.
Req A
Req B1
Req B2
Req B3
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.)
FIFO
Cost of goods sold
Ending inventory
LIFO
Weighted
Average
Req A
Req B1 >
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