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	150	units	@	$	7.50	=	$	1,125
Jan.	10		Sales										110	units	@	$	16.50
Jan.	20		Purchase	80	units	@	$	6.50	=		520
Jan.	25		Sales										90	units	@	$	16.50
Jan.	30		Purchase	200	units	@	$	6.00	=		1,200
			Totals	430	units					$	2,845		200	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 230 units, where 200 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.

Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,350, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.)

2. Which method yields the highest net income?

• Specific identification

• Weighted average

• LIFO

• FIFO

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?

• FIFO

• LIFO

• Specific identification

• Weighted average