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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 $17,000 18,700 (220 units @ $85) 15,200 20,500 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $87 2. Second purchase (cash) 205 units @ $95 3. Sales (all cash) 375 units @ $200 4. Paid $14,750 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 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.) WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 FIFO LIFO Weighted Average Sales Cost of goods sold Gross margin Salaries expense Income before tax 0 0 0 Income tax expenses Net income < Req A Req B2 >

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 $17,000 18,700 (220 units @ $85) 15,200 20,500 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $87 2. Second purchase (cash) 205 units @ $95 3. Sales (all cash) 375 units @ $200 4. Paid $14,750 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 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.) WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 FIFO LIFO Weighted Average Sales Cost of goods sold Gross margin Salaries expense Income before tax 0 0 0 Income tax expenses Net income < Req A Req B2 >

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...
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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 $17,000 18,700 (220 units @ $85) 15,200 20,500 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $87 2. Second purchase (cash) 205 units @ $95 3. Sales (all cash) 375 units @ $200 4. Paid $14,750 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 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.) WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross margin Salaries expense FIFO LIFO Weighted Average Income before tax 0 0 0 Income tax expenses Net income < Req A 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 $17,000 18,700 (220 units @ $85) 15,200 20,500 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $87 2. Second purchase (cash) 205 units @ $95 3. Sales (all cash) 375 units @ $200 4. Paid $14,750 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 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.) WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross margin Salaries expense FIFO LIFO Weighted Average Income before tax 0 0 0 Income tax expenses Net income < Req A Req B2 >
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