Question

Could someone please help me? I am confused.

Saved Built Problems 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 sold at Retail Units Acquired at Cost 195 units $12.00 – $2,340 155 units @ $21.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 135 units @ $21.00 120 units@ $11.00 = 1,320 290 units@ $10.50 = 3,045 605 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. LAKER COMPANY Income Statements Far Month Ended January 31

Answer 1

Solution Income statement for the monits ended January 31 particulars Specific weighted FIFO LIFO Identification overage $6090 6090 6090 Sales & 6090 (-) Cost of goods $ 3365 $3214 $3385 $3045 sold (nowking $ 2976 2705 3045 Gloss profit Expenses (1800) (1800) (1800) (1800) Income. before tar 925 1076 905 Income tax expense (370) (430.4) (362) (498) @ 407 555 645.6 Net Income 543 747 27 25 1245 working pote Liro Method cost of goods sold. units sold 290 cenits units purchased on Jan 30 - 290 units x 10.50 $ 3095 Cost of goods sold 3045 $

working Note: O weighted average cost of inventory Han AUT 1320 Jan 0 opening inventory 195 x 9122,340 Janzo purchases 120* $11 Jan 30 purchases 290x90.50 -3095 605 units & 6705 weighted average cost per unit $6705 $11.083 per unit cost & goods sold OS 290 cenits X $11.083 605 $ 321411 @ FIFO Method - Cost % goods sold:- Opening inventory 195 units @ 4 12.40 (-) sales on Jan 10 $1860 40 units Jan 20. purchases rao unit @ 11 155 units X i X Janar Sales 135 units 40 x 4 12 958 & 11 $480 $ 1095 cost of goods sold $ 3385

id) net income LIFO method Yields the. highest (4747) Answer: - option (3) LIFO. Net income. under LIFO 747 weighted = 645.6 average Net income. under FIFO = 543. u .. Incomie eender weighted average. falls between LIFO & FIFO. :. Answer: Yes. of costs were rising then fifo Yield highest netticome because, inventory is valued at low cost at Stouing point. There fore cost of goods will redence, hence, Profit will increase . Answer: - Option (1) FIFO.
# THANK YOU ??.