Question

laker company reported the following January purchases and sales data for its only product

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. Units Acquired at Cost 160 units @ $8.50 = $1,360 Units sold at Retail 120 units $17.50 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 100 units @ $7.50 = 750 120 units @ $17.50 $7.00 - 220 units @ 480 units 1,540 $3,650 240 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 220 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning in

Answer 1

Laker Company Income Statements For Month Ended January 31 Specific Weighted Identification Average FIFO LIFO Sales $ 4,200 $ 4.200 $ 4,200 $ 4.200 Cost of goods sold S 1.945 S 1.954 S 1.960 $ 1.940 Gross profit $ 2.255 $ 2.246 $ 2.240 $ 2.260 operating expenses 1,450 $ 1,450 $ 1,450 $ 1.450 Income before tax 805 S 796 S 790 S 810 Income tax expense (40%) S 322 S 318 $ 316 S 324 Net Income S 483 $ 477 $ 474 S 486 Workings : Sales 120 unit @ $17.50 per unit 120 unit @ $17.50 per unit $ $ S 2.100 2.100 4,200 2) Specific Identification Purchases Cost of Goods Sold Date cost Activities Jan. 1 Beginning Inventory Jan. 20 Purchase Jan. 30 Purchase Totals Quantity Unit Cost 160 S 8.50 100 $ 7.50 220 S 7.00 480 Total cost S 1,360 $ 750 $ 1.540 $ 3,650 Quantity Unit Cost 145 S 8.50 95 $ 7.50 $ 1,233 S 713 Inventory on Hand Total Quantity Unit Cost cost 1 5 S 8.50 S 128 5 S 7.50 S 38 220 S 7.00 $ 1,540 240 S 1,705 240 $ 1,945 3) Perpetual inventory record using weighted average inventory costing method: Purchases Cost of Goods Sold Date Activities Quantity Unit Cost Total cost Quantity Unit Cost Total cost Jan. 1 Beginning Inventory Jan. 10 Sales 120 S 8.50 $ 1.020 Jan. 20 Purchase 100 S 7.50 $ 750 Inventory on Hand Quantity Unit Cost Total 160 S 8.50 $ 1,360 40 S 8.50 S 340 40 S 8.50 S 340 100 S 7.50 $ 750 140 S 7.79 $ 1.090 20 S 7.79 S 156 20 $ 7.79 S 156 220 $ 7.00 $ 1,540 240 S 7.07 $ 1,696 240 $ 1.696 120 $ 7.79 $ 934 Jan. 25 Sales Jan. 30 Purchase 220 S 7.00 $ 1,540 Totals 320 $ 2.290 $ 1.954 4) Perpetual inventory record using FIFO inventory costing method: Purchases Cost of Goods Sold Total Quantity Unit Cost cost Date Activities Quantity Unit Cost Total cost Jan. 1 Beginning Inventory Jan. 10 Sales Jan. 20 Purchase Inventory on Hand Total Quantity Unit Cost cost 160 S 8.50 $ 1,360 40 S 8.50 S 340 40 S 8.50 S 340 100 S 7.50 $ 750 120 S 8.50 $ 1.020 100 S 7.50 $ 750 Jan. 25 Sales 40 80 S 8.50 S 340 S 7.50 S 600 Jan. 30 Purchase 220 S 7.00 $ 1,540 20 S 7.50 S 150 20 S 7.50 $ 150 220 $ 7.00 $ 1.540 240 S 1.690 Totals 320 S 2.290 240 $ 1,960 5) Perpetual inventory record using LIFO inventory costing method: Purchases Date Activities Quantity Quantity Unit Cost Total cost Cost of Goods Sold Total Quantity Unit Cost cost - Jan. 1 Beginning Inventory Jan. 10 Sales Jan. 20 Purchase Inventory on Hand Quantity Unit Cost Total cost 160 S 8.50 $ 1,360 40 S 8.50 S 340 40 S 8.50 S 340 100 $ 7.50 $ 750 120 S 8.50 $ 1.020 100 S 7.50 $ 750 Jan. 25 Sales 100 S 7.50 $ 750 20 $ 8.50 S 170 Jan. 30 Purchase 220 S 7.00 $ 1,540 20 S 8.50 $ 170 20 S 8.50 $ 170 220 S 7.00 $ 1,540 240 S 1.710 Totals 320 S 2.290 240 $ 1,940