Question

Required information The following information applies to the questions displayed below) of 2 Laker Company reported the following January purchases and sales data for its only product. Units sold at Date Activities Units Acquired at Cost Retail Jan. 1 Beginning inventory 140 units @ $6.00 - $ 840 Jan. 10 Sales 100 units @ $15 Jan. 20 Purchase 6 units @ $5.00 300 Jan. 25 Sales 80 units @ $15 Jan. 30 Purchase 180 units @ $4.58 = 810 Totals 380 units $1,950 180 units - 1 The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 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 $1,250 and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) aces LAKER COMPANY Income Statements For Month Ended January 31 Specific Weighted Identification Average FIFO LIFO 0 0 0 0 Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income 0 0 0 $ 0 $ 0 $ 0 $ 0

Answer 1

LAKER COMPANY Income statements for the month ended January 31 Specific Weighted Particular Identification Average Sales 2700 2700 Less .cost of good sold -1030 -1032 Gross Profit 1670 1668 Less : expenses (as given in QUE) -1250 -1250 Income before taxes 420 418 Less : income tax expenses 40% -168 - 167.2 Net income 252 250.8 FIFO LIFO 2700 2700 -1040-1020 1660 1680 -1250-1250 410 430 -164 -172 246 258

WORKING NOTES:

1/ SALES

date	sales unit	price	sales
10-Jan	100	15	1500
25-Jan	80	15	1200
			2700

2. INVENTORY AND COGS

Specific Identification date particular unit COST AMOUNT unit sold unit cost COGS Ending inventory cost per unit ending inventory cost А в с D E=B-H F=C G H I=C J 01-Jan opening 140 6 840 125 6 750 15 6 90 Jan-20 purchase 60 5 300 56 5 280 4 5 20 Jan-30 purchase 180 4.5 810 0 4.5 180 4.5 810 380 1950 1030 920 WEIGHTED AVERAGE Purchase COGS Inventory date unit COST unit sold unit cost COGS Ending inventory cost per unit ending inventory cost 01-Jan 140 6 840 10-Jan 100 6 600 -100 6 -600 40 6 240 Jan-20 60 5 60 5 300 100 5.4 540 (540/100) 25-Jan 80 5.4 432 -80 5.4 -432 20 5.4 108 (108/20) Jan-30 180 4.5 180 4.5 810 240 180 1032 200 4.59 918 (918/200)

Inventory cost per unit 6 6 ending inventory cost 840 -600 FIFO Purchase COGS date unit COST unit sold unit cost COGS Ending inventory 01-Jan 140 10-Jan 100 6 600 -100 40 Jan-2060 5 60 100 40 6 240 -40 25-Jan 40 5 200 -40 20 Jan-30 180 4.5 180 240 180 1040 200 5 240 300 540 -240 6 6 5 -200 100 4.5 810 910

Inventory cost per unit 6 6 6 ending inventory cost 840 -600 240 LIFO Purchase COGS date unit COST unit sold unit cost COGS Ending inventory 01-Jan 140 10-Jan 100 6 600 -100 40 Jan-2060 5 60 100 60 300 -60 25-Jan 20 6 120 -20 20 Jan-30 180 4.5 180 240 180 1020 200 5 300 540 -300 01 5 6 -120 120 4.5 810 930