Effect of different inventory cost flow methods on financial statements
LO 5-1 The accounting...
Business, 25.02.2020 23:27 melaniem50
Effect of different inventory cost flow methods on financial statements
LO 5-1 The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2:
Cash $ 80,100
Beginning inventory 33,000 (220 units @ $150)
Common stock 50,000
Retained earnings 63,100
The following five transactions occurred in Year 2:
First purchase (cash) 150 units @ $155
Second purchase (cash) 160 units @ $160
Sales (all cash): 410 units @ $320
Paid $38,000 cash for salaries expense
Paid cash for income tax at the rate of 25 percent of income before taxes.
Compute the cost of goods sold and ending (1) FIFO cost flow, (2) LIFO cost flow. Compute the income tax expanses for each method.
Answers: 2
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