**Laker Company Financial Analysis**### For the Month Ended January 31#### Inventory Valuation Methods:1. **Specific Identification**2. **Weighted Average**3. **FIFO (First In, First Out)**4. **LIFO (Last In, First Out)**| Description | Specific Identification | Weighted Average | FIFO | LIFO ||------------------------|-------------------------|------------------|------|------|| **Sales** | | | | || **Cost of Goods Sold** | | | | || **Gross Profit** | | | | |#### Questions: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?(Note: The yellow highlighted areas indicate sections that need input or calculation to complete the table. Consider reviewing data or filling in missing values as needed for comprehensive analysis.) **Laker Company Inventory Data**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 180 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory.| Date | Activities | Units Acquired at Cost | Units Sold at Retail ||---------|--------------------|--------------------------------|-------------------------|| 1-Jan | Beginning inventory| 140 units @ $6.00 = $840 | || 10-Jan | Sales | | 100 units @ $15 || 20-Jan | Purchase | 60 units @ $5.00 = $300 | || 25-Jan | Sales | | 80 units @ $15 || 30-Jan | Purchase | 180 units @ $4.50 = $810 | || | Totals | 380 units | || | | | 180 units || | | | $1,950 |**Specific Identification:**- Ending Inventory Distribution: - 180 units from January 30 purchase - 5 units from January 20 purchase - 15 units from Beginning Inventory**Required:**1. Compute gross profit for the month of January for Laker Company for the four inventory methods. (Use cells A2 to L12 from the given information to complete this question. Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.)**Weighted Average Cost Per Unit on:**- 1-Jan: $6.00- 10-Jan: $6.00- 20-Jan: $5.40- 25-Jan: $5.40- 30-Jan: $4.59**Instructions:**Use this data to analyze and compute the gross profit, applying the four inventory evaluation methods: FIFO, LIFO, Weighted Average, and Specific Identification. Each method will have different implications for the cost of goods sold (COGS) and ending inventory valuation.

Inventory Valuation Methods - Inventory can be valued using various methods - FIFO Method - Under…

Sales Cost of goods sold Gross profit LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO 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?

Sales Cost of goods sold Gross profit LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO 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?

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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Question 1 Indicate which one of the following would not appear on both a single-step income statement and a multiple-step income statement. Question 2 Bolton Company’s gross profit rate last year was 32.0% and this year it is 28.4%. Which of the following would not be a possible cause for this decline in the gross profit rate? Question 3 The amount of cost of good available for sale during the year depends on the amounts of Question 4 The Sales Returns and Allowances account does not provide information to management about Question 5 Stanâ€™s Market recorded the following events involving a recent purchase of merchandise: As a result of these events, the companyâ€™s merchandise inventory Question 6 Gross profit equals the difference between sales and Question 7 A company using a perpetual inventory system that returns goods previously purchased on credit would Question 8 The collection of a $900 account beyond the 2 percent discount period will result in a Question 9 Expenses…
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