Use the following information for the Exercises 3-7 below. (Algo)

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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. For specific identification, ending inventory consists of 355 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	215	units	@	$ 14.00	=	$ 3,010
January 10	Sales							165	units	@	$ 23.00
January 20	Purchase	160	units	@	$ 13.00	=	2,080
January 25	Sales							190	units	@	$ 23.00
January 30	Purchase	355	units	@	$ 11.00	=	3,905
	Totals	730	units				$ 8,995	355	units

Exercise 5-7A (Algo) Periodic: Gross profit effects of inventory methods LO P3, A1

Assume the periodic inventory system is used.

Required:

1. Compute gross profit for the month of January for Laker Company for the four inventory methods using the periodic inventory system. 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?