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 175 units @ $10.00 - $1,750 135 units @ $19.00 Date Activities Jan. 1 Beginning inventory Jan. 19 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 130 units @ $ 9.00 - 1,170 140 units @ $19.00 250 units @ $ 8.50 = 555 units 2,125 $5,045 275 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 250 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 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 $1.600, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) arch ORI IS 40%. (Round your Intermediate calc LAKER COMPANY Income Statements For Month Ended January 31 Specific Weighted Identification Average 5,0457 $ 5,045 $ 1.625 2,644 3,420 2,401 1,600 1,600 1.820 801 546 240 $ 1.274 $ 561 $ FIFO 5,045 LIFO 5,045 Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net Income $ 5.045 1,600 3,445 5.045 1.600 3.445 3,445 $ 3.445 e to search o 2. Which method yields the highest net income? Weighted average O LIFO O FIFO Specific identification 3. Does net income using weighted average fall between that using FIFO and LIFO? Yes O No search O BHI 3. Does net income using weighted average fall between that using FIFO and LIFO? O Yes ONo 4. If costs were rising instead of falling, which method would yield the highest net income? O FIFO Weighted average Specific identification OLIFO - to search O $