5.6

Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 290 units from the January 30 purchase, 5 units from the January 20 purchase, and 20 units from beginning inventory. Units Acquired at Cost 195 units @ $ 12.00 - $ 2,340 Units sold at Retail 155 units @ Activities Beginning inventory Sales Purchase Sales Purchase Date January 1 January 10 January 20 January 25 January 30 $ 21.00 120 units @ $ 11.00 - 1,320 135 units @ $ 21.00 $ 10.50 = 290 units@ 605 units 3,045 $ 6,705 Totals 290 units Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 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? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 to 4 Compute gross profit for the month of January for Laker Company for the four inventory methods. (Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.) LAKER COMPANY For Month Ended January 31 Specific Identification Weighted Average $ 6,090 $ 6,090 $ FIFO LIFO 6,090 $ 6,090 Sales Cost of goods sold Gross profit 6,090 $ 6,090 $ 6,090 $ 6,090