Use the data in Exercise 17-1 to prepare comparative income statements for the month of...

Use the data in Exercise 17-1 to prepare comparative income statements for the month of January for Laker Company similar to those shown in Exhibit 17.8 for the four inventory methods. Assume that expenses other than cost of goods sold are $1,250, and that the applicable income tax rate is 30%.

1. Which method yields the highest net income?

2. Does net income using weighted average fall between that using FIFO and LIFO?

3. If costs were rising instead of falling, which method would yield the highest net income?

Laker Company reported the following January purchases and sales data for its only product.

Laker uses a periodic inventory system. Ending inventory consists of 190 units, 100 from the January 30 purchase, 70 from the January 20 purchase, and 20 from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs to three decimals, but inventory balances to the dollar.)