The accounting records of Wall’s China Shop reflected thefollowing balances as of January 1, Year 3:

Cash	$	19,800
Beginning inventory		19,360		(220 @ $88)
Common stock		14,300
Retained earnings		24,860

The following five transactions occurred in Year 3:

1. First purchase (cash): 115 units @ $90
2. Second purchase (cash): 205 units @ $98
3. Sales (all cash): 365 units @ $198
4. Paid $13,500 cash for salaries expense
5. Paid cash for income tax at the rate of 25 percent of incomebefore taxes
   

Required
a. Compute the cost of goods sold and endinginventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3)weighted-average cost flow. Compute the income tax expense for eachmethod.
b. Use a vertical model to show the Year 3 incomestatement, balance sheet, and statement of cash flows under FIFO,LIFO, and weighted average. (Hint: Record the events underan accounting equation before preparing the statements.)

Required A

Compute the cost of goods sold and ending inventory, assuming(1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-averagecost flow. Compute the income tax expense for each method. (Do notround intermediate calculations. Round your answers to nearestwhole dollar amount.)

	FIFO LIFO Weighted Average Cost of goods sold $32,650 $34,400 ? Ending inventory $17,150 $15,400 ?

Required B1

Use a vertical model to prepare the Year 3 income statementunder FIFO, LIFO, and weighted average. (Do not round intermediatecalculations. Round your answers to nearest whole dollaramount.)

	WALL'S CHINA SHOP Income Statements For the Year Ended December 31, Year3 FIFO LIFO Weighted Average Sales $72,270 $72,270 $72,270 Cost of goods sold Gross margin Salaries expense 13,500 13,500 13,500 Income before tax (13,500) (13,500) (13,500) Income tax expenses Net income

Required B2

Use a vertical model to prepare the Year 3 balance sheet underFIFO, LIFO, and weighted average. (Do not round intermediatecalculations. Round your answers to nearest whole dollaramount.)

	WALL'S CHINA SHOP Balance Sheets As of December 31, Year 3 FIFO LIFO Weighted Average Assets Total assets $0 $0 $0 Stockholders' equity Total stockholders'equity $0 $0 $0

Required B3

Use a vertical model to prepare the Year 3 statement of cashflows under FIFO, LIFO, and weighted average. (Do not roundintermediate calculations. Round your answers to nearest wholedollar amount. Amounts to be deducted should be indicated with aminus sign.)

	WALL'S CHINA SHOP Statements of Cash Flows For the Year Ended December 31, Year3 FIFO LIFO Weighted Average Cash flows from operatingactivities Net cash flows from operatingactivities 0 0 0 Cash flows from investingactivities Cash flows from financingactivities Net change in cash 0 0 0 Ending cash balance $0 $0 $0