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ompany reported the following January purchases and sales data for its only product. For specific identification, ventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 unit ginning inventory. y 1 Activities Beginning inventory Units Acquired at Cost Units sold at Retail 185 units @ $ 11.00 = $ 2,035 y 10 Sales 145 units @ $ 20.00 y 20 Purchase 100 units @ $ 10.00 = 1,000 y 25 Sales 125 units @ $ 20.00 ry 30 Purchase 270 units @ $ 9.50 = Totals 555 units 2,565 $ 5,600 270 units

ompany reported the following January purchases and sales data for its only product. For specific identification, ventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 unit ginning inventory. y 1 Activities Beginning inventory Units Acquired at Cost Units sold at Retail 185 units @ $ 11.00 = $ 2,035 y 10 Sales 145 units @ $ 20.00 y 20 Purchase 100 units @ $ 10.00 = 1,000 y 25 Sales 125 units @ $ 20.00 ry 30 Purchase 270 units @ $ 9.50 = Totals 555 units 2,565 $ 5,600 270 units

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 [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 Activities Beginning inventory January 10 January 20 January 25 Sales Purchase Sales January 30 Purchase Totals 185 units @ 100 units @ 270 units @ 555 units Units Acquired at Cost $ 11.00 = Units sold at Retail $ 2,035 145 units @ $ 20.00 $ 10.00 = 1,000 125 units $ 20.00 $ 9.50 = 2,565 $ 5,600 270 units Assume the periodic inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory system. 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? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory system. Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars. LAKER COMPANY For Month Ended January 31 Sales Cost of goods sold Gross profit $ SA S Specific Identification Weighted Average FIFO LIFO 5,400 $ 5,400 $ 5,400 $ 5,400 2,875 2,727 X 2,885 2,565 2,525 $ 2,673 $ EA 2,515 $ 2,835
Transcribed Image Text:Required information [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 Activities Beginning inventory January 10 January 20 January 25 Sales Purchase Sales January 30 Purchase Totals 185 units @ 100 units @ 270 units @ 555 units Units Acquired at Cost $ 11.00 = Units sold at Retail $ 2,035 145 units @ $ 20.00 $ 10.00 = 1,000 125 units $ 20.00 $ 9.50 = 2,565 $ 5,600 270 units Assume the periodic inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory system. 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? × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory system. Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars. LAKER COMPANY For Month Ended January 31 Sales Cost of goods sold Gross profit $ SA S Specific Identification Weighted Average FIFO LIFO 5,400 $ 5,400 $ 5,400 $ 5,400 2,875 2,727 X 2,885 2,565 2,525 $ 2,673 $ EA 2,515 $ 2,835
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