Question

Use the data and results from Exercise to prepare comparative income statements for the month of January for the company similar to those shown in Exhibit 6.8 for the four inventory methods. Assume expenses are $1,250, and that the applicable income tax rate is 40%. (Round amounts to cents.)
In Exercise Laker Company reported the following January purchases and sales data for its only product.
Required
1. Which method yields the highest net income?
2. Does net income using weighted average fall between that using FIFO and LIFO?
3. If costs were rising instead of falling, which method would yield the highest net income?


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  • CreatedApril 23, 2015
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