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
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F091041cd-3dc2-4e96-ac29-1fe391eb46e8%2Fd2de9557-8aaf-4c36-8ca3-4b5cc966b229%2Faqgaqtx_processed.jpeg&w=3840&q=75)
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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VIEWStep 4: Computation of cost of goods sold and ending inventory using FIFO:
VIEWStep 5: Computation of cost of goods sold and ending inventory using LIFO:
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