Question

Required information [The following information applies to the questions displayed below.] 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 195 units @ $ 12.00 = $ 2,340 Jan. 10 Sales 155 units @ $ 21.00 Jan. 20 Purchase 120 units @ $ 11.00 = 1,320 Jan. 25 Sales 135 units @ $ 21.00 Jan. 30 Purchase 290 units @ $ 10.50 = 3,045 Totals 605 units $ 6,705 290 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 315 units, where 290 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,800 and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.

Answer 1

Perpetual System Under Specific identification Method: Date NO of Units NO of Units Activity 01-Jan Beginning 20-Jan Purchases 30-Jan Purchases Unit cost 195 $ 12.00 120 $ 11.00 290 $ 10.50 Cost of Goods sold Per Unit Total 175 $ 12.00 $ 2,100.00 115 $ 11.00 $ 1,265.00 o $ 10.50 $ - Ending Inventory NO of Units Per Unit Total 20 $ 12.00 $ 240.00 5 $ 11.00 $ 55.00 290 $ 10.50 $ 3,045.00 605 290 $ 3,365.00 315 $ 3,340.00 Perpetual System FIFO Method Purchases Cost of Goods sold Per Unit Total Date Per Unit Total NO of Units NO of Units Jan-01 Ending Inventory NO of Units Per Unit Total 195 $ 12.00 $ 2,340.00 10-Jan 155 12 1860 40 $ 12.00 $ 480.00 20-Jan 120 $ 11.00 $ 1,320.00 40 $ 12.00 120 $ 11.00 $ $ 480.00 1,320.00 25-Jan 25 $ 11.00 $ 275.00 40 $ 12.00 95 $ 11.00 $ $ 480.00 1,045.00 30-Jan 290 $ 10.50 $ 3,045.00 25 $ 11.00 290 $ 10.50 $ $ 275.00 3,045.00 $ 3,385.00 $ 3,320.00 Perpetual System

Perpetual System LIFO Method units Purchases Per Unit per Date Cost of Goods sold Per Unit Total Total Total NO of Units Jan-01 NO of Units No of Units *** Ending Inventory NO of Units Per Unit Total 195 $ 12.00 $ 2,340.00 10-Jan 155 12 1860 40 $ 12.00 $ 480.00 20-Jan 120 $ 11.00 $ 1,320.00 40 $ 12.00 120 $ 11.00 $ $ 480.00 1,320.00 25-Jan 25 $ 12.00 $ 300.00 15 $12.00 120 $ 11.00 $ $ 180.00 1,320.00 30-Jan 290 $ 10.50 $ 3,045.00 25 $ 12.00 290 $ 10.50 $ $ 300.00 3,045.00 $ 3,360.00 $ 3,345.00 Perpetual System Weighted Avg Method Purchases Per Unit Cost of Goods sold Per Unit Total Date Total NO of Units NO of Units Jan-01 Ending Inventory NO of Units Per Unit Total 195 $ 12.00 $ 2,340.00 10-Jan 155 12 1860 40 $ 12.00 $ 480.00 20-Jan 120 $ 11.00 $ 1,320.00 40 $ 12.00 120 $ 11.00 160 $ 11.25 $ $ $ 480.00 1,320.00 1,800.00 25-Jan 135 $ 11.25 $ 1,519 25 $ 11.25 $ 281 30-Jan 290 $ 10.50 $ 3,045.00 25 $11.250 290 $ 10.50 $ $ 281 3,045.00 $ 3,379 $ 3,326

Sales Cost of goods sold Gross profit Operating expenses Income before taxes Income tax expense Net Income tot | Laker Company Income Statement For Month Ended January 31 Specific identification FIFO 6,090.00 $ 6,090.00 3,365.00 $ 3,385.00 2,725.00 $ 2,705.00 1,800.00 $ 1,800.00 925.00 $ 905.00 370.00 $ 362.00 555.00 $ 543.00 LIFO $ 6,090.00 $ 3,360.00 $ 2,730.00 $ 1,800.00 $ 930.00 $ 372.00 $ 558.00 Weighted avg $ 6,090.00 $ 3,379.00 $ 2,711.00 $ 1,800.00 $ 911 $ $ 547 364