### Required Information for Exercises 3-7 (Algo)**Overview:**The following data pertains to inventory management and sales for Laker Company's only product during January. We will explore various methods for determining the gross profit and analyze which method yields the highest profit.**Inventory and Sales Data:**```Date | Activities | Units Acquired at Cost | Units Sold at Retail-----------|---------------------|---------------------------|---------------------January 1 | Beginning inventory | 180 units @ $10.50 = $1,890 | January 10 | Sales | | 140 units @ $19.50 January 20 | Purchase | 110 units @ $9.50 = $1,045 | January 25 | Sales | | 130 units @ $19.50 January 30 | Purchase | 270 units @ $9.00 = $2,430 | | Totals | 560 units $5,365 | 270 units ```**Ending Inventory:**- 270 units consist of: - 5 units from January 20 purchase - 15 units from beginning inventory### Exercise 6-5 (Algo) Perpetual: Gross Profit Effects of Inventory Methods LO A1**Scenario:**Assume the perpetual inventory system is used.**Tasks:**1. Calculate the gross profit for January using four inventory methods: - Specific Identification - Weighted Average - FIFO (First In, First Out) - LIFO (Last In, First Out)2. Identify which method yields the highest gross profit.3. Analyze if the gross profit using the weighted average method falls between that using FIFO and LIFO.4. Determine which method would yield the highest gross profit if costs were rising rather than falling.### Instructions:**Enter Answers in Tabs Below:**- Tab 1 (Req 1): - Compute gross profit for the four inventory methods. - Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollar.- Tab 2 to 4 (Req 2 to 4): - Provide answers to the remaining questions based on your calculations.---#### Table for Reference:```| LAKER COMPANY || For Month Ended January 31 |------------------------------------| | Specific | Weighted |

Gross Profit is the difference between the Sales Revenue and Cost of Goods Sold.

Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?

Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

fast urgent.
d The records of Cordova Corp. showed the following transactions, in the order given, relating to the major inventory item: Required: Complete the following schedule for each independent assumption. (Round unit costs to the nearest cent.) a. 1. Inventory 2. Purchase 3. Sale (at $15.20) 4. Purchase 5. Sale (at $15.20) 6. Purchase 7. Sale (at $18.20) 8. Purchase Independent Assumptions FIFO Weighted average, periodic inventory system Moving average, perpetual inventory system b. Unit Units Cost 5,600 $7.00 11,200 7.30 7,900 10,200 7.60 16,800 18,800 7.76 16,800 11,200 7.90 C. $ Ending Inventory 121,848 121,675 X 121,676 Units and Amounts Cost of Goods Sold $ 311,000 311,064 311,328 $ Gross Margin 370,200 370,136 X 369,872
James's Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2025, James adopted dollar-value LIFO and decided to use a single inventory pool. The company's January 1 inventory consists of: Category Portable Midsize Flat-screen Category Portable Midsize Quantity Cost per Unit $100 Flat-screen 3,000 4,000 1,500 8,500 Quantity Purchased 7,500 During 2025, the company had the following purchases and sales. 10,000 5,000 250 22,500 400 Cost per Unit $110 300 Total Cost 500 $300,000 1,000,000 600,000 $1,900,000 Quantity Sold 7,000 12,000 3,000 22,000 Selling Price per Unit $150 400 600
Companies can use various methods to determine the cost of inventory, including FIFO, LIFO, and average cost. In a period in which the cost of inventory is rising, which of the following statements is true? The LIFO method will result in the lowest income tax expense. The LIFO method will result in the highest inventory balance at year-end. The average cost method will result in the highest net income. The LIFO method will result in the lowest cost of goods sold. The average cost method will result in the lowest inventory balance at year-end. The average cost method will result in the highest inventory balance at year-end. The FIFO method will result in the lowest net income. None of the listed choices are correct.
The following information is taken from a company’s records. Costper Unit Market valueper Unit Inventory Item 1 (10 units) $39 $38 Inventory Item 2 (22 units) 19 19 Inventory Item 3 (12 units) 9 11 Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory? $fill in the blank 1
You have the following information for Bramble Inc. for the month ended June 30, 2022. Bramble uses a periodic inventory system. Date Description Quantity Unit Cost orSelling Price June 1 Beginning inventory 40 $31 June 4 Purchase 135 34 June 10 Sale 110 61 June 11 Sale return 15 61 June 18 Purchase 55 37 June 18 Purchase return 10 37 June 25 Sale 65 67 June 28 Purchase 35 41
Calculate the Inventory Turnover and Day Sales in Inventory ratios for Hayden Co. assuming the FIFO method. Discuss what the ratios demonstrate to you. Assume the industry average for Inventory Turnover is 3.4.
Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost, calculate the average inventory (in $) and inventory turnover for the following. If the actual turnover is less than the published rate, calculate the target average inventory (in $) necessary to come up to industry standards. If the actual turnover is greater than the published rate, enter "above" for target average inventory. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth. Net Sales $4,560,000 Cost of Goods Sold Beginning Ending Inventory Inventory $858,000 $654,300 Average Inventory $ Inventory Published Turnover Rate 8.2 Target Average Inventory
Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Computing the gross profit percentage Macarthy Landscape Supply’s selected accounts as of December 31, 2018, follow. Compute the gross profit percentage for 2018.
[The following information applies to the questions displayed below.] A company reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Inventory Quantity Unit Cost Unit NRV Furniture 170 $ 82 $ 97 Electronics 47 370 285 Required: 1. Calculate the total recorded cost of ending inventory before any adjustments.
Assuming that all net sales figures are at retail and all cost of goods sold figures are at cost, calculate the average inventory (in $) and inventory turnover for the following. If the actual turnover is less than the published rate, calculate the target average inventory necessary to come up to industry standards. If the actual turnover is greater than the published rate, enter "above" for target average inventory. Round inventories to the nearest dollar and inventory turnovers to the nearest tenth Net Sales $560,000 Cost of Goods Sold Beginning Ending Inventory Inventory $137,250 $75,200 $ Average Inventory Inventory Turnover Published Rate 4.8 $ Target Average Inventory