Use the information above to answer the questions. Number 1 Gets cut off, but it

Question

Use the information above to answer the questions. Number 1 Gets cut off, but it reads : Complete comparative income statements for the month of january for Laker Company for the inventory methods. Assume expenses are $1250, and that the applicable income tax rate is 40%. 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 the beginning inventory. (Round the average cost per unit to 2 deciaml places)
[The following information applies to the questions displayed below] Laker Company reported the following January purchases and sales data for its only product Date Jan 1Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Units sold at Retail 100 units $15 80 units $15 180 units Units Acquired at Cost 40 units $6.00 840 60 units @ $5.00.. 300 180 units @ $4.50= 810 Totals 380 units $1,950 References

Explanation / Answer

1. Specifiic Identification

Ending inventory = (180 x $4.50) + (5 x $5.00) + (15 x $6.00) = $925

Cost of goods sold = $1950 - 925 = $1025

Weighted Average

Average cost per unit = $1950/ 380 = $5.13

Cost of goods sold = $5.13 x 180 = $923

FIFO:

Ending inventory = (180 x $4.50) + (20 x $5.00) = $910

Cost of goods sold = $1950 - 910 = $1040

LIFO:

Ending inventory = (140 x $6.00) + (60 x $5.00) = $1140

Cost of goods sold = $1950 - 1140 = $910

Income statement

2. LIFO

3. Yes

4. FIFO

Specific
Identification Weighted
Average FIFO LIFO Sales $2700 $2700 $2700 $2700 Cost of goods sold (1025) (923) (1040) (910) Gross profit $1675 $1777 $1660 $1790 Expenses (1250) (1250) (1250) (1250) Income before taxes $425 $527 $410 $540 Income tax expense (170) (211) (164) (216) Net income $255 $316 $246 $324

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