Accounting

10.value:

10.00 points

  Laker Company reported the following January purchases and sales data for its only product.  DateActivitiesUnits Acquired at CostUnits Sold at Retail Jan.1 Beginning inventory 260 units @  $9.20=$2,392      Jan.10 Sales        145 units @$17.20  Jan.20 Purchase 330 units @  $8.20= 2,706      Jan.25 Sales        255 units @$17.20  Jan.30 Purchase 200 units @  $7.20= 1,440                      Totals 790 units  $6,538 400 units               

Laker uses a perpetual inventory system. For specific identification, ending inventory consists of 390 units, where 200 are from the January 30 purchase, 80 are from the January 20 purchase, and 110 are from beginning inventory.

  1.

Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,700, and that the applicable income tax rate is 39%. (Do not round your Intermediate calculations.)

       2.

Which method yields the highest net income?

   Weighted averageFIFOLIFOSpecific identification  3.

Does net income using weighted average fall between that using FIFO and LIFO?

   YesNo  4.

If costs were rising instead of falling, which method would yield the highest net income?

   Specific identificationFIFOLIFOWeighted average