The accounting records of Walls China Shop reflected the following balances as of January 1, Year 2 D Cash Beginning inventory Common stock Retained earnings $ 19,500 12,470 (145 units @ $86) 14,200 17,770 The following five transactions occurred in Year 2 First purchase (cash): 115 units @ $88 Second purchase (cash): 205 units @ $96 Sales (all cash): 425 units @ $199 Paid $16,150 cash for salaries expenses Paid cash for income tax at the rate of 40 percent of income before taxes Required flow. Compute the income tax expense for each method. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow. (2) LIFO cost flow, and (3) weighted-average cost Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. FIFO LFO Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. Please dont provide solution in an image format thank you
The accounting records of Walls China Shop reflected the following balances as of January 1, Year 2 D Cash Beginning inventory Common stock Retained earnings $ 19,500 12,470 (145 units @ $86) 14,200 17,770 The following five transactions occurred in Year 2 First purchase (cash): 115 units @ $88 Second purchase (cash): 205 units @ $96 Sales (all cash): 425 units @ $199 Paid $16,150 cash for salaries expenses Paid cash for income tax at the rate of 40 percent of income before taxes Required flow. Compute the income tax expense for each method. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow. (2) LIFO cost flow, and (3) weighted-average cost Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. FIFO LFO Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. Please dont provide solution in an image format thank you
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The accounting records of Walls China Shop reflected the following balances as of January 1, Year 2 D
Cash
Beginning inventory
Common stock
$ 19,500
12,470 (145 units @ $86)
14,200
17,770
The following five transactions occurred in Year 2
- First purchase (cash): 115 units @ $88
- Second purchase (cash): 205 units @ $96
- Sales (all cash): 425 units @ $199
- Paid $16,150 cash for salaries expenses
- Paid cash for income tax at the rate of 40 percent of income before taxes
Required
flow. Compute the income tax expense for each method.
- Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow. (2) LIFO cost flow, and (3) weighted-average cost
- Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used.
- FIFO
- LFO
- Weighted Average
c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of
Please dont provide solution in an image format thank you
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