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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) 115 units @ $95 2. Second purchase (cash) 200 units @ $103 3. Sales (all cash) 360 units @ $186 4. Paid $16,750 cash for salaries expense. 5. Paid cash for income tax at the rate of 25 percent of income before taxes. Required $18,500 19,995 (215 units @ $93) 14,700 23,795 W

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) 115 units @ $95 2. Second purchase (cash) 200 units @ $103 3. Sales (all cash) 360 units @ $186 4. Paid $16,750 cash for salaries expense. 5. Paid cash for income tax at the rate of 25 percent of income before taxes. Required $18,500 19,995 (215 units @ $93) 14,700 23,795 W

FINANCIAL ACCOUNTING
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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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) 115 units @ $95 2. Second purchase (cash) 200 units @ $103 3. Sales (all cash) 360 units @ $186 4. Paid $16,750 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 $18,500 19,995 (215 units @ $93) 14,700 23,795 E 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.) tion by entering your answers in the tabs below.
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) 115 units @ $95 2. Second purchase (cash) 200 units @ $103 3. Sales (all cash) 360 units @ $186 4. Paid $16,750 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 $18,500 19,995 (215 units @ $93) 14,700 23,795 E 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.) tion by entering your answers in the tabs below.
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