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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 270 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 Units Acquired at Cost 180 units @ $ 10.50 = 110 units @ $ 9.50 = Assume the perpetual inventory system is used. Required: 270 units @ $ 9.00 = 560 units $ 1,890 1,045 2,430 $5,365 Units sold at Retail 140 units @ @ 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? 130 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 270 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? $19.50 $19.50

Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 270 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 Units Acquired at Cost 180 units @ $ 10.50 = 110 units @ $ 9.50 = Assume the perpetual inventory system is used. Required: 270 units @ $ 9.00 = 560 units $ 1,890 1,045 2,430 $5,365 Units sold at Retail 140 units @ @ 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? 130 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 270 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? $19.50 $19.50

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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Required information Use the following information for the Exercises 3-7 below. (Algo) [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 270 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 Units Acquired at Cost 180 units @ $ 10.50 = $ 9.50 = $9.00 = Assume the perpetual inventory system is used. Required: 110 units @ 270 units @ 560 units $ 1,890 1,045 2,430 $5,365 Units sold at Retail 140 units @ 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? 130 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 270 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? @ $19.50 $19.50
Transcribed Image Text:Required information Use the following information for the Exercises 3-7 below. (Algo) [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 270 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 Units Acquired at Cost 180 units @ $ 10.50 = $ 9.50 = $9.00 = Assume the perpetual inventory system is used. Required: 110 units @ 270 units @ 560 units $ 1,890 1,045 2,430 $5,365 Units sold at Retail 140 units @ 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? 130 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 270 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? @ $19.50 $19.50
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