The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 3: Cash Beginning inventory Common stock Retained earnings $ 17,200 17,630 (205 @ $86) 15,300 19,530 The following five transactions occurred in Year 3 1. First purchase (cash): 120 units @ $88 2. Second purchase (cash): 205 units @ $96 3. Sales (all cash): 355 units @ $187 4. Paid $14,400 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 Compute the income tax expense for each method.

The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 3: Cash Beginning inventory Common stock Retained earnings $ 17,200 17,630 (205 @ $86) 15,300 19,530 The following five transactions occurred in Year 3 1. First purchase (cash): 120 units @ $88 2. Second purchase (cash): 205 units @ $96 3. Sales (all cash): 355 units @ $187 4. Paid $14,400 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 Compute the income tax expense for each method.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...

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