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 10 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Assume the perpetual inventory system is used. Required: Beginning inventory Sales Purchase Sales Purchase Totals Req 1 Activities Req 2 to 4 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? Complete this question by entering your answers in the tabs below. Sales Cost of goods sold Gross profit 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? $ Specific Identification $ Units Acquired at Cost 185 units @ $ 11.00 = $ 10.00 = $9.50 = LAKER COMPANY For Month Ended January 31 Weighted Average 100 units @ 270 units @ 555 units 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. 5,600 $ 5,600 $ 4,050 $ 4,050 $ FIFO 4,050 $ 4,050 $ $ 2,035 1,000 2,565 $ 5,600 LIFO 4,050 4,050 Units sold at Retail 145 units 125 units 270 units @ @ $ 20.00 $ 20.00
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 10 units from beginning inventory. Date January 1 January 10 January 20 January 25 January 30 Assume the perpetual inventory system is used. Required: Beginning inventory Sales Purchase Sales Purchase Totals Req 1 Activities Req 2 to 4 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? Complete this question by entering your answers in the tabs below. Sales Cost of goods sold Gross profit 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? $ Specific Identification $ Units Acquired at Cost 185 units @ $ 11.00 = $ 10.00 = $9.50 = LAKER COMPANY For Month Ended January 31 Weighted Average 100 units @ 270 units @ 555 units 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. 5,600 $ 5,600 $ 4,050 $ 4,050 $ FIFO 4,050 $ 4,050 $ $ 2,035 1,000 2,565 $ 5,600 LIFO 4,050 4,050 Units sold at Retail 145 units 125 units 270 units @ @ $ 20.00 $ 20.00
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 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 units
from beginning inventory.
Date
January 1
January 10
January 20
January 25
January 30
Assume the perpetual inventory system is used.
Required:
Activities
Beginning inventory
Sales
Purchase
Sales
Purchase
Totals
Req 1
Req 2 to 4
Sales
Cost of goods sold
Gross profit
Complete this question by entering your answers in the tabs below.
Specific
Identification
$
LAKER COMPANY
For Month Ended January 31
Weighted
Average
$
Units Acquired at Cost
185 units @ $11.00 =
5,600
100 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?
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?
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.
$
270 units @
555 units
5,600 $
$ 10.00 =
4,050 $
4,050 $
FIFO
$ 9.50 =
4,050 $
4,050 $
LIFO
$ 2,035
4,050
1,000
2,565
$ 5,600
4,050
Units sold at Retail
145 units @
125 units
270 units
@
$ 20.00
$ 20.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F31fed6f5-3ea0-4094-a3f0-abb65bc7a50f%2Ffe17ece4-62ad-4b5e-9ce7-86f34349fa2f%2Fuy5xjb_processed.png&w=3840&q=75)
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 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 units
from beginning inventory.
Date
January 1
January 10
January 20
January 25
January 30
Assume the perpetual inventory system is used.
Required:
Activities
Beginning inventory
Sales
Purchase
Sales
Purchase
Totals
Req 1
Req 2 to 4
Sales
Cost of goods sold
Gross profit
Complete this question by entering your answers in the tabs below.
Specific
Identification
$
LAKER COMPANY
For Month Ended January 31
Weighted
Average
$
Units Acquired at Cost
185 units @ $11.00 =
5,600
100 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?
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?
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.
$
270 units @
555 units
5,600 $
$ 10.00 =
4,050 $
4,050 $
FIFO
$ 9.50 =
4,050 $
4,050 $
LIFO
$ 2,035
4,050
1,000
2,565
$ 5,600
4,050
Units sold at Retail
145 units @
125 units
270 units
@
$ 20.00
$ 20.00
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VIEWStep 3: Computation of cost of goods sold and ending inventory using weighted average:
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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