SalesCost of goods soldGross profitLAKER COMPANYFor Month Ended January 31SpecificIdentificationWeightedAverageFIFOLIFO2. 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? Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventorysystem. For specific identification, ending inventory consists of 180 units from the January 30 purchase, 5 units from the January 20purchase, and 15 units from beginning inventory.DateActivities1-Jan Beginning inventory10-Jan Sales20-Jan Purchase25-Jan Sales30-Jan PurchaseTotals140 units60 units180 units380 unitsUnits Acquired at Cost@$6.00 =$5.00 =$4.50$840300810$1,950Required:1. Compute gross profit for the month of January for Laker Company for the four inventory methods.(Use cells A2 to L12 from the given information to complete this question. Round cost per unit to 2 decimal places andfinal answers to the nearest whole dollars.)Specific Identification180 5Units sold at Retail100 units80 units180 units1-Jan10-Jan20-Jan25-Jan30-Jan15$15$15Weighted average cost per unit on:$6.00$6.00$5.40$5.40$4.59

Inventory Valuation Methods - Inventory can be valued using various methods - FIFO Method - Under…

Sales Cost of goods sold Gross profit LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO 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?

Sales Cost of goods sold Gross profit LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average FIFO LIFO 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?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13A: Perpetual Inventory Method: Lifo And Moving-average Methods

Section: Chapter Questions

Problem 2SPA: PERPETUAL: LIFO AND MOVING-AVERAGE Kelley Company began business on January 1, 20-1. Purchases and...

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