The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 3:CashBeginning inventoryCommon stockRetained earnings$ 19,30019,740 (210 @ $94)15,60023,440The following five transactions occurred in Year 3:41. First purchase (cash): 125 units @ $962. Second purchase (cash): 205 units @ $1043. Sales (all cash): 365 units @ $1874. Paid $13,700 cash for salaries expense5. Paid cash for income tax at the rate of 25 percent of income before taxesRequireda. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow. (2) LIFO cost flow, and (3) weighted-average costflow. Compute the income tax expense for each method.b-1. Use a vertical model to show the Year 3 income statement under FIFO, LIFO, and weighted average. (Hint Record the eventsunder an accounting equation before preparing the statements.)b-2. Use a vertical model to show the Year 3 balance sheet under FIFO, LIFO, and weighted average. (Hint Record the events underan accounting equation before preparing the statements.)b-3. Use a vertical model to show the Year 3 statement of cash flows under FIFO, LIFO, and weighted average. (Hint Record theevents under an accounting equation before preparing the statements.)

Financial Statements are the reports made at the end of the year to calculate the profitability and…

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 $ 19,300 19,740 (210 @ $94) 15,600 23,440 The following five transactions occurred in Year 3: 1. First purchase (cash): 125 units @ $96 2. Second purchase (cash): 205 units @ $104 3. Sales (all cash): 365 units @ $187 4. Paid $13,700 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 co flow. Compute the income tax expense for each method. b-1. Use a vertical model to show the Year 3 income statement under FIFO, LIFO, and weighted average. (Hint. Record the events under an accounting equation before preparing the statements.) b-2. Use a vertical model to show the Year 3 balance sheet under FIFO, LIFO, and weighted average. (Hint. Record the events under

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 $ 19,300 19,740 (210 @ $94) 15,600 23,440 The following five transactions occurred in Year 3: 1. First purchase (cash): 125 units @ $96 2. Second purchase (cash): 205 units @ $104 3. Sales (all cash): 365 units @ $187 4. Paid $13,700 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 co flow. Compute the income tax expense for each method. b-1. Use a vertical model to show the Year 3 income statement under FIFO, LIFO, and weighted average. (Hint. Record the events under an accounting equation before preparing the statements.) b-2. Use a vertical model to show the Year 3 balance sheet under FIFO, LIFO, and weighted average. (Hint. Record the events under

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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