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Problem 5-19A Effect of different inventory cost fhow methods on fimancial statements ag recoeds of...

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Accounting

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Problem 5-19A Effect of different inventory cost fhow methods on fimancial statements ag recoeds of Wall's China Shop reflected the following balances as of January 1, Year 2 CHECK FIGURES a. Cost of Goods Sold FIFO: $62,650 b. Net Income LIFO: $22,012 Cash $80,100 Beginning inventory 33,000 (220 units o $150) Common stock 50,000 Retained carnings 63,100 The following five transactions occurred in Year 2 Page 298 1. Firt purchase (cash): 150 units @S155 2. Second purchase (cash): 160 units $160 3. Sales (all cashi: 410 units@$320 4. Paid 538,000 cash for salaries expense S. 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 () FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method h. Record the five transactions in general journal form and post to T-accounts assuming () 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)

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