Exercise 5-4 Perpetual: Income effects of inventory methods LO A1

Laker Company reported the following January purchases and sales data for its only product.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

350

units

@ $11.00

=

$

3,850

Jan.

10

Sales

190

units

Jan.

20

Purchase

420

units

@ $10.00

=

4,200

Jan.

25

Sales

345

units

Jan.

30

Purchase

290

units

@ $9.00

=

2,610

Totals

1,060

units

$

10,660

535

units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 525 units, where 290 are from the January 30 purchase, 80 are from the January 20 purchase, and 155 are frombeginning inventory.

Required:

1.	Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $3,600, and that the applicable income tax rate is 39%.(Do not round your Intermediate calculations.)

LAKER COMPANY

Income Statements

For Month Ended January 31

Specific

Weighted

Identification

Average

FIFO

LIFO

Sales

$10,165

$10,165

$10,165

$10,165

Cost of goods sold

5,545

Gross profit

4,620

10,165

10,165

10,165

Expenses

3,600

3,600

3,600

3,600

Income before taxes

1,020

6,565

6,565

6,565

Income tax expense

398

Net income

$622

$6,565

$6,565

$6,565

Need help figuring the totals for LIFO, Weighted and Specific