2. Which method yields the highest net income? O Weighted average OLIFO O FIFO Specific identification 3. Does net income using weighted average fall between that using FIFO and LIFO? Yes NO 4. If costs were rising instead of falling, which method would yield the highest net income? O FIFO OLIFO Weighted average Specific identification Required Information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 200 units @ $12.50 = $2,500 Jan. 10 Sales 160 units @ $21.50 Jan. 20 Purchase 130 units @ $11.50 = 1,495 Jan. 25 Sales 140 units @ $21.50 Jan. 30 Purchase 300 units @ $11.00 = Totals 630 units $7,295 300 units Date 3,300 The Company uses a perpetual inventory system. For specific identification, ending Inventory consists of 330 units, where 300 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory. Exercise 5-4 Perpetual: Income effects of inventory methods LO A1 Required: 1. Complete comparative Income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,850, 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 Weighted Identification Average FIFO LIFO Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income