The accounting records of Carrol’s Lamp Shop reflected the following balances as

Question

The accounting records of Carrol’s Lamp Shop reflected the following balances as of January 1, 2014: Cash $ 17,700 Beginning inventory 18,000 (200 units @ $90) Common stock 14,700 Retained earnings 21,000 The following five transactions occurred in 2014: 1. First purchase (cash) 115 units @ $92 2. Second purchase (cash) 195 units @ $100 3. Sales (all cash) 345 units @ $186 4. Paid $16,400 cash for salaries expense. 5. Paid cash for income tax at the rate of 25 percent of income before taxes. I need COGS for FIFO and LIFO with weighted avg and ending inventory please Also how it would breakdown in an income statement.

First: Use a vertical model to prepare the 2014 income statement under FIFO, LIFO, and weighted average. (Do not round intermediate calculations and round your answers to nearest whole dollar amount.)

Next: Use a vertical model to prepare the 2014 balance sheet under FIFO, LIFO, and weighted average.

Finally: Use a vertical model to prepare the 2014 statement of cash flows under FIFO, LIFO, and weighted average.

Explanation / Answer

Assumption :-assume that periodic inventory system is being followed:

cost of goods sold :

FIFO

sale of 345units:

1. 200 units at $90 = $18000

2. 115 units at $92.2 = $10603

3. 30 units at $100.3 =$3009

$31612

cost of ending material = (195 - 30) * $100.3

= 165 * $100.3

= $16549.5   

LIFO

sale of 345units:

ending inventory units = 200 + 115 + 195 - 345 = 165units

cost of goods sold

1. 195 units at $100.3 = 19558.5

2 . 115 units at $92.2 =10603

3 35 unit at $90 = 3150

$33311.5

cost of ending inventory =(200 - 35) * $90

   = $14850

Weighted average cost

Weighted average cost per unit = total cost / total units

   = 200 *90 +115 *92.2 +195 *100.3 / 510

   = 48161.5 / 510

   = $94.4

cost of goods sold = 345 unit * $94. 4 =$32568

cost of ending inventory = 165 * $94.4 = 15576

Income statement under FIFO

sales(345 units * 186.4) 64308

less: cost of goods sold   $31612

less: salary 16400

income before tax 16296

less: income tax 25% 4074

net income   12222

Income statement under LIFO

sales(345 units * 186.4) 64308

less: cost of goods sold    $33311.5

less: salary   16400

income before tax 14596.5

less: income tax 25%    3649.13

net income 10947.37

Income statement under weighted avergae cost

sales(345 units * 186.4) 64308

less: cost of goods sold   $32568

less: salary   16400

income before tax 15340

less: income tax 25%    3835

net income 11505

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