[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 385 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 225 units @ $ 15.00 = 180 units @ $ 14.00 = 385 units @ $ 12.00. 790 units $ 3,375 2,520 4,620 $ 10,515 Units sold at Retail @ 175 units 210 units 385 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 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? $ 24.00 $ 24.00

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Use the following information for the Exercises 3-7 below. (Algo)
[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 385 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
225 units @ $ 15.00-
180 units @ $14.00-
385 units @ $ 12.00 =
790 units
$ 3,375
2,520
4,620
$ 10,515
Units sold at Retail
175 units
210 units
385 units
Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1
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?
@
@
$ 24.00
$ 24.00
Che
Transcribed Image Text:Use the following information for the Exercises 3-7 below. (Algo) [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 385 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 225 units @ $ 15.00- 180 units @ $14.00- 385 units @ $ 12.00 = 790 units $ 3,375 2,520 4,620 $ 10,515 Units sold at Retail 175 units 210 units 385 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 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? @ @ $ 24.00 $ 24.00 Che
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. (Round cost per unit to 2
decimal places and final answers to the nearest whole dollars.)
Sales
Cost of goods sold
Gross profit
LAKER COMPANY
For Month Ended January 31
Specific
Identification
$
Weighted
Average
0 $
0
$
EA
FIFO
0 $
LIFO
0
Transcribed Image Text: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. (Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.) Sales Cost of goods sold Gross profit LAKER COMPANY For Month Ended January 31 Specific Identification $ Weighted Average 0 $ 0 $ EA FIFO 0 $ LIFO 0
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