Question

Required information Use the following information for the Exercises below [The following information applies to the questions displayed below. Laker Company reported the following January purchases and sales data for its only product. Activities Units Acquired at Cost Date Jan. 1 Beginning inventory 220 units $14.50-$3,190 Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Units sold at Retail 170 units $23.50 200 units $23.50 170 units $13.50 2,295 340 unitsa S13.00 4,420 730 units Totals $9,905 370 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 360 units, where 340 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory

Answer 1

CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER FIFO METHOD
		PURHASES			COST OF GOODS SOLD			CLOSING BALANCE
Date	Particulars	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost
Jan, 01	Opening Inventory							220	$14.50	$3,190
Jan, 10	Sales				170	$14.50	$2,465	50	$14.50	$725
Jan, 20	Purchases	170	$13.50	$2,295				50	$14.50	$725
								170	$13.50	$2,295
Jan, 25	Sales				50	$14.50	$725
					150	$13.50	$2,025	20	$13.50	$270
Jan, 30	Purchases	340	$13.00	$4,420				20	$13.50	$270
								340	$13.00	$4,420
					370		$5,215	360		$4,690
	Cost of Ending inventory=	$4,690
	Cost o Goods Sold =	$5,215
CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER LIFO METHOD
		PURHASES			COST OF GOODS SOLD			CLOSING BALANCE
Date	Particulars	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost
Jan, 01	Opening Inventory							220	$14.50	$3,190
Jan, 10	Sales				170	$14.50	$2,465	50	$14.50	$725
Jan, 20	Purchases	170	$13.50	$2,295				50	$14.50	$725
								170	$13.50	$2,295
Jan, 25	Sales				170	$13.50	$2,295
					30	$14.50	$435	20	$14.50	$290
Jan, 30	Purchases	340	$13.00	$4,420				20	$14.50	$290
								340	$13.00	$4,420
					370		$5,195	360		$4,710
	Cost of Ending inventory=	$4,710
	Cost o Goods Sold =	$5,195
CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER WEIGHTED AVERAGE COST
		PURHASES			COST OF GOODS SOLD			CLOSING BALANCE
Date	Particulars	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost
Jan, 01	Opening Inventory							220	$14.50	$3,190
Jan, 10	Sales				170	$14.50	$2,465	50	$14.50	$725
Jan, 20	Purchases	170	$13.50	$2,295				220	$13.73	$3,020
Jan, 25	Sales				200	$13.73	$2,746	20	$13.73	$275
Jan, 30	Purchases	340	$13.00	$4,420				360	$13.04	$4,695
					370		$5,211	360		$4,695
	Cost of Ending inventory=	$4,695
	Cost o Goods Sold =	$5,211
CALCULATION OF COST OF ENDING INVENTORY AND COST OF GOODS SOLD UNDER SPECIFIC IDENTIFICATION
		PURHASES			COST OF GOODS SOLD			CLOSING BALANCE
Date	Particulars	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost	Units (A)	Rate Per unit	Total Cost
Jan, 01	Opening Inventory	220	$14.50	$3,190	205	$14.50	$2,973	15	$14.50	$218
Jan, 20	Purchases	170	$13.50	$2,295	165	$13.50	$2,228	5	$13.50	$68
Jan, 30	Purchases	340	$13.00	$4,420				340	$13.00	$4,420
	Avaialbe For sales	730		$9,905
					370		$5,200	360		$4,705
	Cost of Ending inventory=	$4,705
	Cost o Goods Sold =	$5,200
	LAKER COMPANY
	INCOME STATEMENT
	FOR THE MONTH ENDED JANUARY 31
		Identification	Weighted Average	FIFO	LIFO
	Sales
	170 units @ $ 23.50	$3,995	$3,995	$3,995	$3,995
	200 units @ $ 23.50	$4,700	$4,700	$4,700	$4,700
	Total Sales	$8,695	$8,695	$8,695	$8,695
	Less: Cost of Goods Sold	$5,200	$5,211	$5,215	$5,195
	Gross Profit	$3,495	$3,484	$3,480	$3,500
	Less: Expenses	2050	2050	2050	2050
	Income before taxes	$1,445	$1,434	$1,430	$1,450
	Tax @ 40%	$578	$574	$572	$580
	Net income	$867	$860	$858	$870
	Answer sub Part
	Answer = 1)
	LIFO method yield the highest net income
	Answer = 2)
	Yes , Net income using weighted average fall between using LIFO and FIFO
	Answer = 3)
	If the Cost are rising than FIFO method will give the highest net income