Question

Required Information The following Information applies to the questions displayed below Laker Company reported the following January purchases and sales data for ts only product. Part 2 of 2 Units sold at Retail 125 units $18.0 125 units $18.0 Units Acquired at Cost an. 1 Beginning inventory Jan. 1e Sales an. 29 Purchase Jan. 25 Sales an. 3 Purchase 165 units$9.6$1,485 118 units $8.6BB8 238 units $7.51.725 Totals 585 units $4,899 250 units The Company uses a perpetual Inventory system. For specific Identification, ending Inventory consists of 255 unlts, where 230 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning Inventory. Required: 1. Complete comparatlve Income statements for the month of January for Laker Company for the four Inventory methods. Assume expenses are $1,500, and that the applicable income tax rate is 40%. (Round your intermediate calculations to 2 decimal places.) Income Statements For Month Ended January 31 Specific Weighted FIFO LIFO Sales Cost of goods sold Gross profi Expenses Income before taxes Income tax expense Net income 0S 0S 0S 2 Which method ylelds the highest net Income? Welghted average OSpecific Identification O LIFO O FIFO 3. Does net Income usIng welghted average fall between that using FIFO and LIFO? O Yes O No 4. If costs were rising Instead of falling, which method would yleld the highest net Income? Welghted average O LIFO OSpecific Identification O FIFO



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