[The following information applies to the questions displayed below.] 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 355 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 $ 14.00 = 215 units @ 160 units @ 355 units @ 730 units $ 13.00 = $ 11.00 = $3,010 2,080 3,905 $ 8,995 Units sold at Retail 165 units 190 units 355 units @ @ $23.00 $23.00 Required: . Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory ystem. E. Which method yields the highest gross profit? . Does gross profit using weighted average fall between that using FIFO and LIFO? . If costs were rising instead of falling, which method would yield the highest gross profit?
[The following information applies to the questions displayed below.] 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 355 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 $ 14.00 = 215 units @ 160 units @ 355 units @ 730 units $ 13.00 = $ 11.00 = $3,010 2,080 3,905 $ 8,995 Units sold at Retail 165 units 190 units 355 units @ @ $23.00 $23.00 Required: . Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory ystem. E. Which method yields the highest gross profit? . Does gross profit using weighted average fall between that using FIFO and LIFO? . If costs were rising instead of falling, which method would yield the highest gross profit?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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. The Company uses a
perpetual inventory system. For specific identification, ending inventory consists of 355 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
215 units @ $ 14.00 =
160 units
355 units
730 units
@
@
$ 13.00 =
$ 11.00 =
Units sold at Retail
$ 3,010
2,080
3,905
$ 8,995 355 units
165 units
190 units
@
@
$23.00
$23.00
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6ee690c1-7550-48bb-b0b1-146590e5cb48%2F9544a938-376e-4802-a51b-a4bc93e19a3b%2Fb7bioqk_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. The Company uses a
perpetual inventory system. For specific identification, ending inventory consists of 355 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
215 units @ $ 14.00 =
160 units
355 units
730 units
@
@
$ 13.00 =
$ 11.00 =
Units sold at Retail
$ 3,010
2,080
3,905
$ 8,995 355 units
165 units
190 units
@
@
$23.00
$23.00
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?
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