Question - Laker Company reported the following January purchases and sales data for its only product.
|
Date
|
Activities
|
Units Acquired at Cost
|
Unit Sold at Retail
|
|
Jan 1
|
Beginning inventory
|
140 units @ $6.00 = $840
|
|
|
Jan 10
|
Sales
|
|
100 units @ $15
|
|
Jan 20
|
Purchase
|
60 units @ $5.00 = 300
|
|
|
Jan 25
|
Sales
|
|
80 units @ $15
|
|
Jan 30
|
Purchase
|
180 units @ $4.50 = 810
|
|
|
|
Totals
|
380 units $1,950
|
180 units
|
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 200 units, where 180 are from the January 30 purchase. 5 are from the January 20 purchase, and 15 are from beginning inventory.
Required -
1. Complete comparative income statements for the month of January for Later Company for the four inventory methods. Assume expenses are $1,250, and that the applicable income tax rate is 40%.