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 320 units @ $10.40 = $ 3,328 Jan. 10 Sales 175 units @$18.40 Jan. 20 Purchase 390 units @ $9.40 = 3,666 Jan. 25 Sales 315 units @$18.40 Jan. 30 Purchase 260 units @ $8.40 = 2,184 Totals 970 units $ 9,178 490 units Laker uses a perpetual inventory system. For specific identification, ending inventory consists of 480 units, where 260 are from the January 30 purchase, 80 are from the January 20 purchase, and 140 are from beginning inventory. 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $3,300, and that the applicable income tax rate is 39%. (Do not round your Intermediate calculations.) 2. Which method yields the highest net income? LIFO Specific identification Weighted average 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? Weighted average FIFO LIFO Specific identification