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Exercise 6-4 Perpetual: Income effects of inventory methods LO A1 Laker Company...

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Accounting

Exercise 6-4 Perpetual: Income effects of inventory methods LO A1

Laker Company reported the following January purchases and sales data for its only product.

Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 190 units @ $7.80 = $ 1,482
Jan. 10 Sales 110 units @$15.80
Jan. 20 Purchase 260 units @ $6.80 = 1,768
Jan. 25 Sales 185 units @$15.80
Jan. 30 Purchase 130 units @ $5.80 = 754
Totals 580 units $ 4,004 295 units

Required:

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 285 units, where 130 are from the January 30 purchase, 80 are from the January 20 purchase, and 75 are from beginning inventory.

1.

Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,000, and that the applicable income tax rate is 35%. (Do not round your Intermediate calculations.)

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