Laker Company reported the following January purchases and sales data for its only product. For specific identification,ending inventory consists of 228 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase,and 43 are from beginning inventory.DateJanuary 1ActivitiesBeginning inventory154 units @January 10Sales4:48January 30PurchaseedPTotalsJanuary 20 PurchaseJanuary 25 Sales74 units @180 units @408 unitsUnits Acquired at Cost$ 6.00 =$ 5.00Units sold at Retail$ 92486 units @$ 15.00=37094 units @$ 15.00$ 4.50=810$ 2,104 180 unitsExercise 5-7A (Algo) Perpetual: Gross profit effects of inventory methods LO P3, A1Assume the perpetual inventory system is used.Required:es1. Compute gross profit for the month of January for Laker Company for the four inventory methods.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?Complete this question by entering your answers in the tabs below.Req 1Req 2 to 4Drov

The specific identification method relates to inventory valuation, specifically keeping track of…

Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 228 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 43 are from beginning inventory. Date Activities January 1 Beginning inventory January 10 Sales January 20 Purchase 48 January 25 Sales January 30 Purchase Totals 74 units @ 180 units @ 408 units Units Acquired at Cost 154 units @ $ 6.00 = $ 924 $ 5.00 = $ 4.50 = Units sold at Retail 370 94 units @ 86 units @ $ 15.00 $ 15.00 810 $ 2,104 180 units Exercise 5-7A (Algo) Perpetual: Gross profit effects of inventory methods LO P3, A1 Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4

Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 228 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 43 are from beginning inventory. Date Activities January 1 Beginning inventory January 10 Sales January 20 Purchase 48 January 25 Sales January 30 Purchase Totals 74 units @ 180 units @ 408 units Units Acquired at Cost 154 units @ $ 6.00 = $ 924 $ 5.00 = $ 4.50 = Units sold at Retail 370 94 units @ 86 units @ $ 15.00 $ 15.00 810 $ 2,104 180 units Exercise 5-7A (Algo) Perpetual: Gross profit effects of inventory methods LO P3, A1 Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...

See similar textbooks

Similar questions

Calculate the cost of goods sold dollar value for A67 Company for the month, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for weighted average (AVG).
Carla Company uses the perpetual inventory system. The following information is available for January of the current year when Carla sold 1,600 units of inventory on January 14. Using the FIFO method, calculate Carlas cost of goods sold for January and its January 31 inventory.
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of the merchandise sold on October 29, and (c) the inventory on October 31.
The following three identical units of Item BZ1810 are purchased during November: Assume that one unit is sold on November 30 for 90. Determine the gross profit for November and ending inventory on November 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods.
Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows: Instructions 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. Present data in columnar form, using the following headings: If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method, following the procedures indicated in (1). 3. Determine the cost of the inventory on December 31 by the weighted average cost method, using the columnar headings indicated in (1). 4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
Calculate the cost of goods sold dollar value for A65 Company for the month, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for first-in, first-out (FIFO).
Pappas Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the year, and the inventory count at December 31 are summarized as follows: Instructions 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. Present data in columnar form, using the following headings: If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method, following the procedures indicated in (1). 3. Determine the cost of the inventory on December 31 by the weighted average cost method, using the columnar headings indicated in (1). 4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.
Akira Company had the following transactions for the month. Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for $25 each. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Beginning inventory, purchases, and sales for WCS12 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) the weighted average unit cost after the October 22 purchase, (b) the cost of goods sold on October 29, and (c) the inventory on October 31.
Calculate the cost of goods sold dollar value for B74 Company for the sale on November 20, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.