The accounting records of Wall's China Shop reflected the following balances as of January 1...
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Accounting
The accounting records of Wall's China Shop reflected the following balances as of January 1 , Year 3 : The following five transactions occurted in Year 3 : 1. First purchase (cash): 115 units o $90 2. Second purchase (cash): 195 units a $98 3. Sales (all cash) 355 units 0 \$187 4. Paid $13,900 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) LFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method. b-1. Use a vertical model to show the Year 3 income statement under FIFO, LFO, 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, LFO, and weighted average. (Hint Record the events under on 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 the events under an accounting equation before preparing the statements.)
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