Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 310 units from the January 30 purchase, 5 units from the January 20 purchase, and 30 units from beginning inventory. Date Activities Units Acquired at Cost Units sold at Retail January 1 Beginning inventory 205 units @ $ 13.00 = $ 2,665 January 10 Sales 165 units @ $ 22.00 January 20 Purchase 140 units @ $ 12.00 = 1,680 January 25 Sales 145 units @ $ 22.00 January 30 Purchase 310 units @ $ 11.50 = 3,565 Totals 655 units $ 7,910 310 units Assume the perpetual inventory system is used. Required: Compute gross profit for the month of January for Laker Company for the four inventory methods. Which method yields the highest gross profit? Does gross profit using weighted average fall between that using FIFO and LIFO? If costs were rising instead of falling, which method would yield the highest gross profit? Compute gross profit for the month of January for Laker Company for the four inventory methods. Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars. LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO Sales Cost of goods sold Gross profit 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? 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?

Name: Laker Company reported the following January purchases and sales data
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 310 units from the January 30 purchase, 5 units from the January 20 purchase, and 30 units from begi

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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Date	Activities	Units Acquired at Cost	Units sold at Retail
January 1	Beginning inventory	205	units	@	$ 13.00	=	$ 2,665
January 10	Sales							165	units	@	$ 22.00
January 20	Purchase	140	units	@	$ 12.00	=	1,680
January 25	Sales							145	units	@	$ 22.00
January 30	Purchase	310	units	@	$ 11.50	=	3,565
	Totals	655	units				$ 7,910	310	units

Required:

Compute gross profit for the month of January for Laker Company for the four inventory methods.
Which method yields the highest gross profit?
Does gross profit using weighted average fall between that using FIFO and LIFO?
If costs were rising instead of falling, which method would yield the highest gross profit?

Compute gross profit for the month of January for Laker Company for the four inventory methods.
Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.

LAKER COMPANY
For Month Ended January 31
	Specific Identification	Weighted Average	FIFO	LIFO
Sales
Cost of goods sold
Gross profit

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?

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?

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