Laker company reported the following January purchases and sales data for its only product.
Date
Activities
Units Acquired at Cost
Units sold at Retail
Jan. 1
Beginning inventory
180 units @ $10.50 = $1,890
Jan. 10
Sales
120 units @ $19.50
Jan. 20
Purchase
110 units @ $9.50 = 1,045
Jan- 25
Sales
150 units @ $19.50
Jan 30
Purchase
260 units @ $9.00 = 2,340
Totals
550 units - $5,275
270 units
The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 260 are from the January 30 purchase. 5 are from the January 20 purchase, inventory al inventory system.
Required
1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are S1.650, and that the applicable income tax rate is 40%. (Round your intermediate calculations to 2 decimal places.)
2. Which method yields the highest net income?
_____ Specific identification
_____ LIFO
_____ Weighted average
_____ FIFO
3. Does net income use a weighted average fall between that using FIFO and LIFO?
Laker company reported the following January purchases and sales data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail |
|---|---|---|---|
| Jan. 1 | Beginning inventory | 180 units @ $10.50 = $1,890 | |
| Jan. 10 | Sales | 120 units @ $19.50 | |
| Jan. 20 | Purchase | 110 units @ $9.50 = 1,045 | |
| Jan- 25 | Sales | 150 units @ $19.50 | |
| Jan 30 | Purchase | 260 units @ $9.00 = 2,340 | |
| Totals | 550 units - $5,275 | 270 units |
The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 260 are from the January 30 purchase. 5 are from the January 20 purchase, inventory al inventory system.
Required
1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are S1.650, and that the applicable income tax rate is 40%. (Round your intermediate calculations to 2 decimal places.)
2. Which method yields the highest net income?
_____ Specific identification
_____ LIFO
_____ Weighted average
_____ FIFO
3. Does net income use a weighted average fall between that using FIFO and LIFO?
Related questions
| Laker Company reported thefollowing January purchases and sales data for its onlyproduct. |
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 190 | units | @ $7.80 | = | $ | 1,482 | ||||||||
| Jan. | 10 | Sales | 110 | units | @$15.80 | |||||||||||
| Jan. | 20 | Purchase | 260 | units | @ $6.80 | = | 1,768 | |||||||||
| Jan. | 25 | Sales | 185 | units | @$15.80 | |||||||||||
| Jan. | 30 | Purchase | 130 | units | @ $5.80 | = | 754 | |||||||||
| Totals | 580 | units | $ | 4,004 | 295 | units | ||||||||||
Laker uses a perpetual inventory system. For specificidentification, ending inventory consists of 285 units, where 130are from the January 30 purchase, 80 are from the January 20purchase, and 75 are from beginning inventory. |
| 1. | Complete comparative income statements for the month of Januaryfor Laker Company for the four inventory methods. Assume expensesare $2,000, and that the applicable income tax rate is 35%.(Do not round your Intermediate calculations.) |
| 2. | Which method yields the highest net income? | ||||||||
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| 3. | Does net income using weighted average fall between that usingFIFO and LIFO? | ||||
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| 4. | If costs were rising instead of falling, which method wouldyield the highest net income? | ||||||||
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Use the following information for the Exercisesbelow.
[The following information applies to the questionsdisplayed below.]
Laker Company reported the following January purchases and salesdata for its only product.
Date | Activities | Units Acquired at Cost | Units sold at Retail | ||||||||||||||
Jan. | 1 | Beginning inventory | 140 | units | @ | $ | 6.00 | = | $ | 840 | |||||||
Jan. | 10 | Sales | 100 | units | @ | $ | 15 | ||||||||||
Jan. | 20 | Purchase | 60 | units | @ | $ | 5.00 | = | 300 | ||||||||
Jan. | 25 | Sales | 80 | units | @ | $ | 15 | ||||||||||
Jan. | 30 | Purchase | 180 | units | @ | $ | 4.50 | = | 810 | ||||||||
Totals | 380 | units | $ | 1,950 | 180 | units | |||||||||||
The Company uses a perpetual inventory system. For specificidentification, ending inventory consists of 200 units, where 180are from the January 30 purchase, 5 are from the January 20purchase, and 15 are from beginning inventory.
Exercise 6-3 Perpetual: Inventory costing methods LO P1
Required:
1. Complete the table to determine the costassigned to ending inventory and cost of goods sold using specificidentification.
2. Determine the cost assigned to ending inventoryand to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventoryand to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventoryand to cost of goods sold using LIFO.
Required 3
Required 4
Complete the table to determine the cost assigned to endinginventory and cost of goods sold using specific identification.
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Determine the cost assigned to ending inventory and to cost ofgoods sold using weighted average. (Round cost per unit to 2decimal places.)
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Determine the cost assigned to ending inventory and to cost ofgoods sold using FIFO.
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Determine the cost assigned to ending inventory and to cost ofgoods sold using LIFO.
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| Hemming Co. reported the following current-year purchases and salesdata for its only product. |
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 120 | units | @ $10.80 | = | $ | 1,296 | ||||||||
| Jan. | 10 | Sales | 110 | units | @$40.80 | |||||||||||
| Mar. | 14 | Purchase | 270 | units | @ $15.80 | = | 4,266 | |||||||||
| Mar. | 15 | Sales | 160 | units | @$40.80 | |||||||||||
| July | 30 | Purchase | 420 | units | @ $20.80 | = | 8,736 | |||||||||
| Oct. | 5 | Sales | 280 | units | @$40.80 | |||||||||||
| Oct. | 26 | Purchase | 620 | units | @ $25.80 | = | 15,996 | |||||||||
| Totals | 1,430 | units | $ | 30,294 | 550 | units | ||||||||||
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| Hemming uses a periodic inventory system. |
| (a) | Determine the costs assigned to ending inventory and to cost ofgoods sold using FIFO. |
| (b) | Determine the costs assigned to ending inventory and to cost ofgoods sold using LIFO. |
| (c) | Compute the gross margin for each method. I'm trying to do this in Excel, but my homework checkerkeeps telling me it's inccorrect. |
