5 Pre-Built Problems Saved Help Use the following information for the Exercises below. The following information applies to the questions displayed below.) 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 175 units @ $10.00 - $1,750 Jan. 10 Sales 135 units @ $19.00 Jan. 20 Purchase 130 units @ $ 9.00 - 1,170 Jan. 25 Sales 140 units $19.00 Jan. 30 Purchase 250 units $8.50 2,125 Totals 555 units $5,045 275 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 250 are from the January 30 purchase. 5 are from the January 20 purchase, and 25 are from beginning inventory. Exercise 5-4 Perpetual: Income effects of inventory methods LO A1 Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,600, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) Help Save C Required information 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1600, and that the applicable income tax rate is 40% (Round your Intermediate calculations to 2 decimal places.) FIFO LIFO 52255 5.225 Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Not Income LAKER COMPANY Income Statements For Month Ended January 31 Specific Weighted Identification Average $ 5 225 5 52255 2.625 2 600 5225 1.600 1 600 1.000 3.625 400 5 600 $ 3.625 5 5,225 1,600 3.625 5 225 1.600 3.625 3.625 $ 3.625 2. Which method yields the highest net income? Specific identification O Weighted average O LIFO O FIFO 3. Does net income using weighted average fall between that using FIFO and LIFO? O Yes O No 4. If costs were rising instead of falling, which method would yield the highest net income? Weichter averace