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 400 units from the January 30 purchase, 5 units from the January 20 purchase, and 15 units from beginning inventory.

Date	Activities	Units Acquired at Cost						Units sold at Retail
January 1	Beginning inventory	230	units	@	$ 15.50	=	$ 3,565
January 10	Sales							180	units	@	$ 24.50
January 20	Purchase	190	units	@	$ 14.50	=	2,755
January 25	Sales							220	units	@	$ 24.50
January 30	Purchase	400	units	@	$ 14.00	=	5,600
	Totals	820	units				$ 11,920	400	units

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?

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	FIFO	LIFO
Sales
Cost of goods sold
Gross profit	$0	$0	$0	$0

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?

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?

• FIFO
• LIFO
• Specific identification
• Weighted average