Use the data in Exercise 5-3 to compute gross profit for the month of January for Laker Company similar to that in Exhibit 5.8 for the four inventory methods.

Data from Exhibit 5.8

1. Which method yields the highest gross profit?
2. Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO?
3. If costs were rising instead of falling, which method would yield the highest gross profit?

Data from Exercise 5-3

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

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Trekking Company For Month Ended August 31 Income Statement Sales ........ Cost of goods sold..... Gross profit.... Balance Sheet Inventory.... Specific Identification $6,050 4,582 $1,468 $1,408 FIFO LIFO $6,050 $6,050 4,570 4,730 $1,480 $1,320 $1,420 $1,260 Weighted Average $6,050 4,622 $1,428 $1,368