The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 2: Cash $ 18,700 Beginning inventory 19,780 (215 units @ $92) Common stock 14,200 Retained earnings 24,280 The following five transactions occurred in Year 2: First purchase (cash) 125 units @ $94 Second purchase (cash) 195 units @ $102 Sales (all cash) 370 units @ $196 Paid $16,000 cash for salaries expense Paid cash for income tax at the rate of 25 percent of income before taxes Required Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. 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.)
The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 2: Cash $ 18,700 Beginning inventory 19,780 (215 units @ $92) Common stock 14,200 Retained earnings 24,280 The following five transactions occurred in Year 2: First purchase (cash) 125 units @ $94 Second purchase (cash) 195 units @ $102 Sales (all cash) 370 units @ $196 Paid $16,000 cash for salaries expense Paid cash for income tax at the rate of 25 percent of income before taxes Required Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 2:
Cash | $ |
18,700 |
||
Beginning inventory | 19,780 | (215 units @ $92) | ||
Common stock | 14,200 | |||
24,280 |
||||
The following five transactions occurred in Year 2:
- First purchase (cash) 125 units @ $94
- Second purchase (cash) 195 units @ $102
- Sales (all cash) 370 units @ $196
- Paid $16,000 cash for salaries expense
- Paid cash for income tax at the rate of 25 percent of income before taxes
Required
- Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow.
- Use a vertical model to show the Year 2 income statement,
balance sheet , and statement ofcash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under anaccounting equation before preparing the statements.)
![Complete this question by entering your answers in the tabs below.
Req A
Req B1
Cost of goods sold
Ending inventory
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.)
FIFO
Req B3
LIFO
Weighted
Average
< Req A
Req B1 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1ece6948-a6ed-4917-9cc1-92918a1ca1a3%2Fa6def95e-b003-4ae4-b251-aaaf12d662eb%2Faiqat87a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Req A
Req B1
Cost of goods sold
Ending inventory
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.)
FIFO
Req B3
LIFO
Weighted
Average
< Req A
Req B1 >
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