Required information Use the following information for the Exercises below. [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 Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 140 units @ $6.00 = $ 840 100 units @ $ 15 60 units @ $5.00 = 300 80 units @ $ 15 180 units @ $4.50 = _ 810 380 units $1,950 180 units Exercise 5-4 Periodic: Income effects of inventory methods LO A1 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. Required: 1. Prepare 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%. 2. Which method yields the highest net income? 3. Does net income using weighted average fall above, between, or below that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest net income? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare 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 average cost per unit to 2 decimal places.) LANCR COMPANY $ Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income LAKER COMPANY Income Statements For Month Ended January 31 Specific Weighted Identification Average $ 2,700.00 $ 2,700.00 1.025.00 1.032.00 1,675.00 1,668.00 1,250.00 1,250.00 425.00 418.00 170.00 167.00 X $ 255.00 $ 251.00 FIFO 2,700.00 1,040.00 1,660.00 1,250.00 410.00 164.00 246.00 L IFO $2,700.00 1,020.00 X 1,680.00 1,250.00 430.00 172.00 X $ 258.00 $ Required 1 Required 2 >