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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 periodic inventory system. For specific identification, ending inventory consists of 214 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 29 are from beginning inventory. Units sold at Retail 93 units @ $15.00 87 units @ $15.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost 147 units @ $6.00 - $ 882 67 units@ $5.00- 335 180 units@ $4.50- 394 units ume the perpetual inventory system is used. quired: 810 $2,027 180 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?

[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 periodic inventory system. For specific identification, ending inventory consists of 214 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 29 are from beginning inventory. Units sold at Retail 93 units @ $15.00 87 units @ $15.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost 147 units @ $6.00 - $ 882 67 units@ $5.00- 335 180 units@ $4.50- 394 units ume the perpetual inventory system is used. quired: 810 $2,027 180 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?

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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[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 periodic inventory system. For specific identification, ending inventory consists of 214 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 29 are from beginning inventory. Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 147 units@ $6.00 - $882 93 units@ $15.00 67 units @ $5.00 87 units @ $15.00 180 units@ 394 units 180 units Assume the perpetual Inventory system is used. Required: $4.50- 335 810 $2,827 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?
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 periodic inventory system. For specific identification, ending inventory consists of 214 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 29 are from beginning inventory. Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 147 units@ $6.00 - $882 93 units@ $15.00 67 units @ $5.00 87 units @ $15.00 180 units@ 394 units 180 units Assume the perpetual Inventory system is used. Required: $4.50- 335 810 $2,827 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?
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