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. Units sold at Retail Units Acquired at Cost 205 units@ $13.00 = $ 2,665 165 units @ $22.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase 140 units@ $12.00 = 1,680 145 units @ $22.00 310 units@ $11.50 = 655 units 3,565 $ 7,910 Totals 310 its The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 345 units, where 310 are from the January 30 purchase, 5 are from the January 20 purchase, and 30 are from beginning inventory. Exercise 5-4 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 $1,900 and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) Income Statements For Month Ended January 31 Specific Weighted Identification Average FIFO LIFO Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income 2. Which method yields the highest net income? Weighted average O FIFO LIFO Specific identification 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? Specific identification Weighted average OLIFO FIFO