ompany reported the following January purchases and sales data for its only product. For specific identification, ventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 unit ginning inventory. y 1 Activities Beginning inventory Units Acquired at Cost Units sold at Retail 185 units @ $ 11.00 = $ 2,035 y 10 Sales 145 units @ $ 20.00 y 20 Purchase 100 units @ $ 10.00 = 1,000 y 25 Sales 125 units @ $ 20.00 ry 30 Purchase 270 units @ $ 9.50 = Totals 555 units 2,565 $ 5,600 270 units
ompany reported the following January purchases and sales data for its only product. For specific identification, ventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 unit ginning inventory. y 1 Activities Beginning inventory Units Acquired at Cost Units sold at Retail 185 units @ $ 11.00 = $ 2,035 y 10 Sales 145 units @ $ 20.00 y 20 Purchase 100 units @ $ 10.00 = 1,000 y 25 Sales 125 units @ $ 20.00 ry 30 Purchase 270 units @ $ 9.50 = Totals 555 units 2,565 $ 5,600 270 units
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 5PA
Related questions
Question
min.8
![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. For specific identification,
ending inventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 units
from beginning inventory.
Date
January 1
Activities
Beginning inventory
January 10
January 20
January 25
Sales
Purchase
Sales
January 30
Purchase
Totals
185 units @
100 units @
270 units @
555 units
Units Acquired at Cost
$ 11.00 =
Units sold at Retail
$ 2,035
145 units
@
$ 20.00
$ 10.00 =
1,000
125 units
$ 20.00
$ 9.50 =
2,565
$ 5,600
270 units
Assume the periodic inventory system is used.
Required:
1. Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory
system.
2. Which method yields the highest gross profit?
3. Does gross profit using weighted average fall between that using FIFO and LIFO?
4. If costs were rising instead of falling, which method would yield the highest gross profit?
× Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory
system.
Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.
LAKER COMPANY
For Month Ended January 31
Sales
Cost of goods sold
Gross profit
$
SA
S
Specific
Identification
Weighted
Average
FIFO
LIFO
5,400 $
5,400 $
5,400 $
5,400
2,875
2,727 X
2,885
2,565
2,525
$
2,673
$
EA
2,515 $
2,835](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3a9ae246-2079-4a07-9ffd-ec1153804ad1%2F3d9da199-284b-4f5b-a08d-b0415bcdf7de%2Fb4hemyp_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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. For specific identification,
ending inventory consists of 270 units from the January 30 purchase, 5 units from the January 20 purchase, and 10 units
from beginning inventory.
Date
January 1
Activities
Beginning inventory
January 10
January 20
January 25
Sales
Purchase
Sales
January 30
Purchase
Totals
185 units @
100 units @
270 units @
555 units
Units Acquired at Cost
$ 11.00 =
Units sold at Retail
$ 2,035
145 units
@
$ 20.00
$ 10.00 =
1,000
125 units
$ 20.00
$ 9.50 =
2,565
$ 5,600
270 units
Assume the periodic inventory system is used.
Required:
1. Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory
system.
2. Which method yields the highest gross profit?
3. Does gross profit using weighted average fall between that using FIFO and LIFO?
4. If costs were rising instead of falling, which method would yield the highest gross profit?
× Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 to 4
Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory
system.
Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.
LAKER COMPANY
For Month Ended January 31
Sales
Cost of goods sold
Gross profit
$
SA
S
Specific
Identification
Weighted
Average
FIFO
LIFO
5,400 $
5,400 $
5,400 $
5,400
2,875
2,727 X
2,885
2,565
2,525
$
2,673
$
EA
2,515 $
2,835
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