Exercise 5-4 Perpetual: Journalizing transactions P1 Refer to sales and purchases data from Exercise 5-3 and record journal entries for Laker Company's sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and FIFO. All sales and purchases are made on account, and no discounts are offered. Exercise 5-5 Perpetual: Gross profit effects of inventory methods A1 Use the data in Exercise 5-3 to compute gross profit for the month of January for Laker Company similar to that in Exhibit 5.8 for the four inventory methods. 1. Which method yields the highest gross profit? 2. Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO? 3. If costs were rising instead of falling, which method would yield the highest gross profit? Exercise 5-3 Perpetual: Inventory costing methods P1 Laker Company reported the following January purchases and sales data for its only product. Date Activities Jan. 1 Jan. 10 Beginning inventory.... Sales Units Acquired at Cost 140 units @$6.00 $ 840 Units Sold at Retail 100 units @ $15 Jan. 20 Jan. 25 Purchase. Sales 60 units @ $5.00 = 300 80 units @ $15 Jan. 30 Purchase Totals 180 units @$4.50= 810 380 units $1,950 180 units Required The company uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs and inventory amounts to cents.) For specific identification, ending inventory consists of 180 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory.
Exercise 5-4 Perpetual: Journalizing transactions P1 Refer to sales and purchases data from Exercise 5-3 and record journal entries for Laker Company's sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and FIFO. All sales and purchases are made on account, and no discounts are offered. Exercise 5-5 Perpetual: Gross profit effects of inventory methods A1 Use the data in Exercise 5-3 to compute gross profit for the month of January for Laker Company similar to that in Exhibit 5.8 for the four inventory methods. 1. Which method yields the highest gross profit? 2. Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO? 3. If costs were rising instead of falling, which method would yield the highest gross profit? Exercise 5-3 Perpetual: Inventory costing methods P1 Laker Company reported the following January purchases and sales data for its only product. Date Activities Jan. 1 Jan. 10 Beginning inventory.... Sales Units Acquired at Cost 140 units @$6.00 $ 840 Units Sold at Retail 100 units @ $15 Jan. 20 Jan. 25 Purchase. Sales 60 units @ $5.00 = 300 80 units @ $15 Jan. 30 Purchase Totals 180 units @$4.50= 810 380 units $1,950 180 units Required The company uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs and inventory amounts to cents.) For specific identification, ending inventory consists of 180 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Exercise 5-4
Perpetual: Journalizing transactions P1
Refer to sales and purchases data from Exercise 5-3 and record journal entries for Laker Company's sales and purchases transactions. Assume for
this assignment that the company uses a perpetual inventory system and FIFO. All sales and purchases are made on account, and no discounts are
offered.
Exercise 5-5
Perpetual: Gross profit effects of inventory methods
A1
Use the data in Exercise 5-3 to compute gross profit for the month of January for Laker Company similar to that in Exhibit 5.8 for the four
inventory methods.
1. Which method yields the highest gross profit?
2. Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO?
3. If costs were rising instead of falling, which method would yield the highest gross profit?
Transcribed Image Text:Exercise 5-3
Perpetual: Inventory costing methods
P1
Laker Company reported the following January purchases and sales data for its only product.
Date
Activities
Jan. 1
Jan. 10
Beginning inventory....
Sales
Units Acquired at Cost
140 units @$6.00 $ 840
Units Sold at Retail
100 units @ $15
Jan. 20
Jan. 25
Purchase.
Sales
60 units @ $5.00 = 300
80 units @ $15
Jan. 30
Purchase
Totals
180 units @$4.50= 810
380 units
$1,950
180 units
Required
The company uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific
identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs and inventory amounts to cents.) For specific identification,
ending inventory consists of 180 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning
inventory.
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