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Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 370 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales. Purchase Sales Purchase Totals Assume the perpetual inventory system is used. Required: Units Acquired at Cost 220 units @ $14.50 = 170 units @ $13.50 = $ 13.00 = 370 units @ 760 units Units sold at Retail $ 3,190 2,295 4,810 $ 10,295 370 units 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of felling, which method would yield the highest gross profit? 170 units 200 units 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? @ @ $23.50 $ 23.50

Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 370 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales. Purchase Sales Purchase Totals Assume the perpetual inventory system is used. Required: Units Acquired at Cost 220 units @ $14.50 = 170 units @ $13.50 = $ 13.00 = 370 units @ 760 units Units sold at Retail $ 3,190 2,295 4,810 $ 10,295 370 units 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of felling, which method would yield the highest gross profit? 170 units 200 units 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? @ @ $23.50 $ 23.50

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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[The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 370 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Assume the perpetual inventory system is used. Required: Units Acquired at Cost 220 units @ $14.50 = 170 units @ $13.50 = 370 units @ $ 13.00 = 760 units $ 3,190 2,295 4,810 $ 10,295 Units sold at Retail 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? 170 units 200 units 370 units 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? @ @ $ 23.50 $ 23.50
Transcribed Image Text:[The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 370 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Assume the perpetual inventory system is used. Required: Units Acquired at Cost 220 units @ $14.50 = 170 units @ $13.50 = 370 units @ $ 13.00 = 760 units $ 3,190 2,295 4,810 $ 10,295 Units sold at Retail 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? 170 units 200 units 370 units 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? @ @ $ 23.50 $ 23.50
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