Required information 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. Units sold at Retail Units Acquired at Cost 225 units@ $15.00 - $ 3,375 175 units @ $24.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 180 units@ $14.00 = 2,520 210 units @ $24.00 350 units@ $13.50 = 755 units 4,725 $10,620 385 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 370 units, where 350 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 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 $2,100 and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) LAKER COMPANY Income Statements For Month Ended January 31 Specific Weighted Identification Average $ 8,400 $ 8,400 $ FIFO 8,400 LIFO 8,400 $ Sales Cost of goods sold Gross profit Expenses Income before taxes Income tax expense Net income 8,400 2,100 6,300 8,400 2,100 6,300 8,400 2,100 6,300 8,400 2,100 6,300 $ 6,300 $ 6,300 $ 6,300 $ 6,300 2. Which method yields the highest net income? O FIFO Weighted average OLIFO O Specific identification 3. Does net income using weighted average fall between that using FIFO and LIFO? Yes O No 4. If costs were rising instead of falling, which method would yield the highest net income? OLIFO Weighted average O FIFO Specific identification