Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 250 units from the January 30 purchase, 5 units from the January 20 purchase, and 20 units from beginning inventory.| Date | Activities | Units Acquired at Cost | Units Sold at Retail ||------------|---------------------|-------------------------|----------------------|| January 1 | Beginning inventory | 165 units @ $9.00 = $1,485 | || January 10 | Sales | | 125 units @ $18.00 || January 20 | Purchase | 110 units @ $8.00 = $880 | || January 25 | Sales | | 125 units @ $18.00 || January 30 | Purchase | 250 units @ $7.50 = $1,875 | || **Totals** | | **525 units** = $4,240 | **250 units** | ## Laker Company Inventory Analysis### Instructions1. **Compute gross profit for the month of January for Laker Company using the four inventory methods**: - Specific Identification - Weighted Average - FIFO (First-In, First-Out) - LIFO (Last-In, First-Out)2. **Determine which method yields the highest gross profit.**3. **Assess whether the gross profit using the weighted average method falls between that of using FIFO and LIFO.**4. **Analyze the scenario where costs are rising instead of falling, and identify which method would yield the highest gross profit.**### Calculation GuidelinesComplete this analysis by entering your answers in the designated tabs.#### Data Table: Gross Profit Computation- **Sales**: To be computed for each method.- **Cost of Goods Sold (COGS)**: To be computed for each method.- **Gross Profit**: Calculate for each method using the formula: \[ \text{Gross Profit} = \text{Sales} - \text{Cost of Goods Sold} \]**Note**: Round cost per unit to two decimal places and final answers to the nearest whole dollars.---This exercise will help you understand the impact of different inventory valuation methods on gross profit, vital for strategic financial planning and analysis.

Name: Laker Company reported the following January purchases and sales data
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Description: Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 250 units from the January 30 purchase, 5 units from

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Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 250 units from the January 30 purchase, 5 units from the January 20 purchase, and 20 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 $ 9.00 = $ 8.00 = $ 7.50 = 165 units @ 110 units @ 250 units @ 525 units $ 1,485 880 1,875 $ 4,240 Units sold at Retail 125 units 125 units 250 units $ 18.00 $ 18.00

Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 250 units from the January 30 purchase, 5 units from the January 20 purchase, and 20 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 $ 9.00 = $ 8.00 = $ 7.50 = 165 units @ 110 units @ 250 units @ 525 units $ 1,485 880 1,875 $ 4,240 Units sold at Retail 125 units 125 units 250 units $ 18.00 $ 18.00

FINANCIAL ACCOUNTING

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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