Question

Just need corrections for wrong answers

Requlred Informetlon [The following information applies to the questions displayed below. Laker Company reported the following January purchases and sales data for its only product. Units sold at Retail 178 units $23.5e 288 units $23.5e 378 units Activities Units Acquired at Cost Date Jan. 1 Beginning inventory Jan. 18 Sales Jan. 2e Purchase Jan. 25 Sales Jan. 3e Purchase 220 units$14.58-$3, 19e 178 units$13.582,295 48 units $13.8e4,428 Totals 30 units $9,985 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. Requlred 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,050, and that the applicable income tax rate is 40%. 2. Which method yields the highest net income? 3. Does net income using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling. which method would yield the highest net income? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below

Answer 1

Answer 1.
Specific Identification Method
Ending Inventory
Date	Units	Cost	Total
30-Jan	340	13.00	4,420.00
20-Jan	5	13.50	67.50
1-Jan	15	14.50	217.50
	360		4,705.00
Cost of Goods Sold = $9,905 - $4,705
Cost of Goods Sold = $5,200
Weighted Average
Date	Purchases			Cost of Goods Sold			Balance
	Unit	Cost	Total	Unit	Cost	Total	Unit	Cost	Total
1-Jan							220	14.50	3,190.00
10-Jan				170	14.50	2,465.00	50	14.50	725.00
20-Jan	170	13.50	2,295.00				50	14.50	725.00
							170	13.50	2,295.00
							220	13.73	3,020.00
25-Jan				200	13.73	2,745.45	20	13.73	274.55
30-Jan	340	13.00	4,420.00				20	13.73	274.55
							340	13.00	4,420.00
							360	13.04	4,694.55
Total	510		6,715.00	370		5,210.45
FIFO
Date	Purchases			Cost of Goods Sold			Balance
	Unit	Cost	Total	Unit	Cost	Total	Unit	Cost	Total
1-Jan							220	14.50	3,190.00
10-Jan				170	14.50	2,465.00	50	14.50	725.00
20-Jan	170	13.50	2,295.00				50	14.50	725.00
							170	13.50	2,295.00
							220		3,020.00
25-Jan				50	14.50	725.00	20	13.50	270.00
				150	13.50	2,025.00
				200		2,750.00
30-Jan	340	13.00	4,420.00				20	13.50	270.00
							340	13.00	4,420.00
							360		4,690.00
Total	510		6,715.00	370		5,215.00
LIFO
Date	Purchases			Cost of Goods Sold			Balance
	Unit	Cost	Total	Unit	Cost	Total	Unit	Cost	Total
1-Jan							220	14.50	3,190.00
10-Jan				170	14.50	2,465.00	50	14.50	725.00
20-Jan	170	13.50	2,295.00				50	14.50	725.00
							170	13.50	2,295.00
							220		3,020.00
25-Jan				170	13.50	2,295.00	20	14.50	290.00
				30	14.50	435.00
				200		2,730.00
30-Jan	340	13.00	4,420.00				20	14.50	290.00
							340	13.00	4,420.00
							360		4,710.00
Total	510		6,715.00	370		5,195.00

LAKER COMPANY
Income Statements
For the Month Ended Jan 31
	Specific Identification	Weighted Average	FIFO	LIFO
					Sales	8,695.00	8,695.00	8,695.00	8,695.00
Cost of Goods Sold	5,200.00	5,210.45	5,215.00	5,195.00
Gross Profit	3,495.00	3,484.55	3,480.00	3,500.00
Expense	2,050.00	2,050.00	2,050.00	2,050.00
Income Before Tax	1,445.00	1,434.55	1,430.00	1,450.00
Income Tax Expense - 40%	578.00	573.82	572.00	580.00
Net Income	867.00	860.73	858.00	870.00
Answer 2.
LIFO Method - $870
Answer 3.
Yes
Answer 4.
FIFO Method