Question

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 190 units@ $7.00 =$1,330 Jan. 10 Sales 150 units @ $16.00 Jan. 20 Purchase 110 units@ $6.00 =660 Jan. 25 Sales 130 units @ $16.00 Jan. 30 Purchase 280 units@ $5.50 = 1,540 __________ Totals 580 units $3,530 280 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 300 units, where 280 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 5-4 Perpetual: Income effects of inventory methods LO A1 Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,750, and that the applicable income tax rate is 40%. (round your intermediate calculations to 2 decimal places.)

Answer 1

Solution: