[rwa956]

The accounting records of Helen's Clock Shop reflected following balances as of January 1, 2011.

Cash $50,800
Beginning inventory 56,000 (200 units @ $280)
Common stock 43,000
Retained earnings 63,800

The following five transactions occurred in 2011:

1. first purchase (cash) 120 units @ $300
2. second purchase (cash) 140 units @ $330
3. sales (all cash) 400 units @ $450
4. paid $ 30,000 cash for salaries expense.
5. paid cash for income tax at the rate of 25 percent of income before taxes.

1. fifo cost flow, 2. lifo cost flow, 3. weighted average

[Just Looking]

We don't answer homework questions here without your first trying to show your answers. We can then help show you if you are right or where you went wrong. Just to get you started, you first need to understand the definitions of FIFO, LIFO, and weighted average. For example, FIFO is first in first out, and with this method it is deemed that the first items in the inventory are the first ones sold. In your example, you have:

200 items @ $280 to start
120 items @ $300 are added first
140 items @ $330 are added second

If 400 units are sold, you look at the "layers" above and starting with the beginning inventory (because these were first in, and therefore deemed sold first) 200 @ $280 can be used. You still need 200 more to reach 400, so you next use the 120 items added first, and finally the remaining 80 come out of the 140 items added second. By applying the costs as stated, you can determine the cost of the items sold and the cost still remaining in inventory.