Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1

Assume the perpetual inventory system is used.

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?

Required information Use the following information for the Exercises 3-7 below. (Algo) [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 400 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory. Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 Assume the perpetuat inventory system is used. 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 nsing instead of falling, which method would yield the highest gross profit? Assume the perpetual inventory system is used. 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 faling, which method would yield the highest gross profit? Complete this question by entering your answers in the tabs below. Compute gross profit for the month of January for Laker Company for the four inventory methods. Note: Round cost per unit to 2 decimal places and final answers to the neorest whole dollars. 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 averoge 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. 2. Which method yieds the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instesd of falling. which method would yield the highest gross profit