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 And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...

See similar textbooks

Similar questions

FINANCIAL RATIOS Based on the financial statements for Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 596597, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventory
FINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and the average number of days required to collect receivables 6. Inventory turnover and the average number of days required to sell inventory
FINANCIAL RATIOS Based on the financial statements, shown on pages 603604, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventory
Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following transactions: a. Made credit sales of $825,000. The cost of the merchandise sold was $560,000. b. Collected accounts receivable in the amount of $752,600. c. Purchased goods on credit in the amount of $574,300. d. Paid accounts payable in the amount of $536,200. Required: Prepare the journal entries necessary to record the transactions. Indicate whether each transaction increased cash, decreased cash, or had no effect on cash.
Cost of goods sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8: Estimated returns of current year sales 11,600 Inventory, May 1, 20Y7 380,000 Inventory, April 30, 20Y8 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the Cost of goods sold section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
Sandren Co. purchased inventory on credit from Acto Supply Co. for $4,000. Sandren Co. would record this transaction in the ________. A. general journal B. cash receipts journal C. cash disbursements journal D. purchases journal E. sales journal
Accounts receivable and inventory turnover The following data (in millions) were adapted from recent financial statements of Apple Inc (AAPL) Compute the inventory turnover for Years 1 and 2. Round to one decimal place.
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2: Cash Beginning inventory Common stock Retained earnings $19,300 18, 245 (205 units @ $89) 14,800 22,745 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $91 2. Second purchase (cash) 195 units @ $99 3. Sales (all cash) 360 units @ $200 4. Paid $16,650 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 cost flow. b. 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.)
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 $ 17,200 17,630 (205 @ $86) 15,300 19,530 The following five transactions occurred in Year 3 1. First purchase (cash): 120 units @ $88 2. Second purchase (cash): 205 units @ $96 3. Sales (all cash): 355 units @ $187 4. Paid $14,400 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 cost flow Compute the income tax expense for each method.
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2: Cash Beginning inventory Common stock Retained earnings $18,200 19,320 (210 units @ $92) 14,200 23,320 The following five transactions occurred in Year 2: 1. First purchase (cash) 115 units @ $94 2. Second purchase (cash) 200 units @ $102 3. Sales (all cash) 355 units @ $187 4. Paid $13,600 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 cost flow. b. 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Compute the cost of goods…
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2: Cash Beginning inventory Common stock Retained earnings $17,000 18,700 (220 units @ $85) 15,200 20,500 The following five transactions occurred in Year 2: 1. First purchase (cash) 125 units @ $87 2. Second purchase (cash) 205 units @ $95 3. Sales (all cash) 375 units @ $200 4. Paid $14,750 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 cost flow. b. 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.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Use a vertical model to show…
The accounting records of Wall's China Shop reflected the following balances as of January 1, Year 2 Cash Beginning inventory Common stock Retained earnings $ 17,600 14,260 (155 units @ $92) 14,700 17,160 The following five transactions occurred in Year 2 1. First purchase (cash): 120 units @ $94 2. Second purchase (cash): 205 units @ $102 3. Sales (all cash): 425 units @ $197 4. Paid $15,000 cash for salaries expenses 5. Paid cash for income tax at the rate of 40 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 cost flow. Compute the income tax expense for each method. b. Record the above transactions in general journal form and post to T-accounts assuming each of the cost flows listed. Assume perpetual inventory system is used. 1. FIFO 2 LIFO 3. Weighted Average c. Use a vertical model to show the Year 2 income statement, balance sheet, and statement of cash flows…