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[The following information applies to the questions displayed below.] 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	140	units	@	$	6.00	=	$	840
Jan.	10	Sales										100	units	@	$	15
Jan.	20	Purchase	60	units	@	$	5.00	=		300
Jan.	25	Sales										80	units	@	$	15
Jan.	30	Purchase	180	units	@	$	4.50	=		810
		Totals	380	units					$	1,950		180	units

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Exercise 6-4 Perpetual: Income effects of inventory methods LO A1

Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,250 and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.)

LAKER COMPANYIncome Statements For Month Ended January 31 SpecificWeighted IdentificationAverage FIFOLIFO Sales Cost of goods sold Gross profit0000 Expenses Income before taxes0000 Income tax expense Net income $0$0$0$0

2. Which method yields the highest net income? multiple choice 1

• Weighted average

• LIFO

• FIFO

• Specific identification

3. Does net income using weighted average fall between that using FIFO and LIFO? multiple choice 2

• Yes

• No

4. If costs were rising instead of falling, which method would yield the highest net income? multiple choice 3

• Specific identification

• FIFO

• Weighted average

• LIFO