Secure https://newconnect.mheducation.com/flow/connect.html ulz Chapter 6 6 Save
ID: 2566593 • Letter: S
Question
Secure https://newconnect.mheducation.com/flow/connect.html ulz Chapter 6 6 Saved Laker Company reported the following January purchases and sales data for its only product 2 ivit Units Acquired at Cost ts sold at Retail 130 units $18.58 130 units $18.50 260 units an. 1 Beginning inventory Jan. 10 Sales an. 20 Purchase Jan. 25 Sales Jan. 38 Purchase 179 units $9.58 $1,615 120 units $8.5 1,020 240 units $8.01,928 Totals 530 units $4,555 The Company uses a perpetual inventory system For specific identification, ending inventory consists of 270 units, where 240 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 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 $1,550, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places LAKER COMPANY Income Statements For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO 4.81 4 810 S 4810 Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income 4,810 1,550 3 260 4810 4,810 1,55 3.260 1,550 1,550 3.260 3 260 3,260 S 3.260 $ 3,26Explanation / Answer
Specific Identification
Weighted Average - Perpetual:
Perpetual FIFO:
Perpetual LIFO:
LAKER COMPANY
Specific Identification
Availablefor Sale Cost
of Goods Sold Ending Inventory Purchase Date Activity Units Unit Cost Units
Sold Unit Cost COGS Ending Inventory- Units Cost
Per Unit Ending
Inventory- Cost Jan. 1 Beginning inventory 170 $9.50 145 $9.50 $1,378
25 9.5 237.5 Jan. 20 Purchase 120 $8.50 115 $8.50 $978 5 8.5 42.5 Jan. 30 Purchase 240 $8.00 240 8 1920 530 260 2355 270 2200
Weighted Average - Perpetual:
Goods Purchased Cost of Goods Sold InventoryBalance Date #
of units Cost per unit # of
units sold Cost per unit Cost
of Goods Sold # of
units Cost per unit Inventory Balance January 1 170 @ $9.50 = $1,615.00 January
10 130 @ $9.50 = $1,235.00
40 @ $9.50 = $380.00
January 20 120 @ $8.50 40 @ $9.50 = $380.00 120 @ $8.50 = $1,020.00
Average cost 160 @ $8.75 $1,400.00 january 25 130 @ $8.75 = $1,137.50
30 @ $8.75 = $262.50 January 30 240 @ $8.00 30 @ $8.75 = $262.50 240 @ $8.00 = $1,920.00 Totals $2,372.50
270 @ $8.08 $2,182.50
Perpetual FIFO:
Goods Purchased Cost of Goods Sold InventoryBalance Date #
of units Cost per unit # of
units sold Cost per unit Cost
of Goods Sold # of
units Cost per unit Inventory Balance January 1 170 @ $9.50 = $1,615.00 January
10 130 @ $9.50 = $1,235.00
40 @ $9.50 = $380.00 January 20 120 @ $8.50 40 @ $9.50 = $380.00 120 @ $8.50 = $1,020.00 $1,400.00 January 25 40 @ 9.5 = 380 @ $9.50 = 90 @ 8.5 = 765 30 @ $8.50 = $255.00 $1,145.00
255 January 30 240 @ $8.00 @ $9.50 30 @ $8.50 = $255.00 240 @ $8.00 = $1,920.00 Totals $2,380.00
2175
Perpetual LIFO:
Goods Purchased Cost of Goods Sold InventoryBalance Date #
of units Cost per unit # of
units sold Cost per unit Cost
of Goods Sold # of
units Cost per unit Inventory Balance January 1 170 @ $9.50 = $1,615.00 January
10 130 @ $9.50 = $1,235.00
40 @ 9.5 = 380 January 20 120 @ $8.50 40 @ $9.50 = 380 120 @ 8.5 = 1020 1400 January 25 10 @ 9.5 = 95 30 @ 9.5 = 285 120 @ 8.5 = 1020 0 @ 8.5 = $1,115.00
285 January 30 240 @ $8.00 30 @ $9.50 = $285.00 240 @ $8.00 = $1,920.00 Totals 2350 2205
LAKER COMPANY
Income Statements For Month Ended January 31 Specific Weighted Identification Average FIFO LIFO Sales $4,810.00 $ 4,810.00 $ 4,810.00 $4,810.00 Cost of goods sold 2,355.00 2,372.50 2,380.00 2,350.00 Gross profit 2,455.00 2,437.50 2,430.00 2,460.00 Expenses 1,550 1,550 1,550 1,550 Income before taxes 905.00 887.50 880.00 910.00 Income tax expense 362.00 355.00 352.00 364.00 Net income 543.00 532.50 528.00 546.00