Park Company reported thefollowing March purchases and sales data for its only product.
Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $7.60 = $ 1,368 Mar. 10 Sales 105 units @$15.60 Mar. 20 Purchase 250 units @ $6.60 = 1,650 Mar. 25 Sales 175 units @$15.60 Mar. 30 Purchase 120 units @ $5.60 = 672 Totals 550 units $ 3,690 280 units
Park uses a perpetual inventory system. For specificidentification, ending inventory consists of 270 units, where 120are from the March 30 purchase, 80 are from the March 20 purchase,and 70 are from beginning inventory.
1. Complete comparative income statements for the month of Marchfor Park Company for the four inventory methods. Assume expensesare $1,900, and that the applicable income tax rate is30%.(Round per unit costs to three decimal places. Roundyour answers to the nearest dollar amounts. Input all amounts aspositive values. Omit the "$" sign in your response.)
PARK COMPANY
Income Statements
For Month Ended March 31 Specific
Identification Weighted
Average FIFO LIFO Sales $ $ $ $ Cost of goodssold Gross profit Expenses Income beforetaxes Income taxexpense Net income $ $ $ $
2. Which method yields the highest net income?
FIFO LIFO Weighted average Specificidentification
3. Does net income using weighted average fall between that usingFIFO and LIFO?
Yes No
4. If costs were rising instead of falling, which method wouldyield the highest net income?
Specificidentification Weighted average LIFO FIFO
| Park Company reported thefollowing March purchases and sales data for its only product. |
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Mar. | 1 | Beginning inventory | 180 | units | @ $7.60 | = | $ | 1,368 | ||||||||
| Mar. | 10 | Sales | 105 | units | @$15.60 | |||||||||||
| Mar. | 20 | Purchase | 250 | units | @ $6.60 | = | 1,650 | |||||||||
| Mar. | 25 | Sales | 175 | units | @$15.60 | |||||||||||
| Mar. | 30 | Purchase | 120 | units | @ $5.60 | = | 672 | |||||||||
| Totals | 550 | units | $ | 3,690 | 280 | units | ||||||||||
Park uses a perpetual inventory system. For specificidentification, ending inventory consists of 270 units, where 120are from the March 30 purchase, 80 are from the March 20 purchase,and 70 are from beginning inventory. |
| 1. | Complete comparative income statements for the month of Marchfor Park Company for the four inventory methods. Assume expensesare $1,900, and that the applicable income tax rate is30%.(Round per unit costs to three decimal places. Roundyour answers to the nearest dollar amounts. Input all amounts aspositive values. Omit the "$" sign in your response.) |
| PARK COMPANY Income Statements For Month Ended March 31 | ||||
| Specific Identification | Weighted Average | FIFO | LIFO | |
| Sales | $ | $ | $ | $ |
| Cost of goodssold | ||||
| Gross profit | ||||
| Expenses | ||||
| Income beforetaxes | ||||
| Income taxexpense | ||||
| Net income | $ | $ | $ | $ |
| 2. | Which method yields the highest net income? | ||||||||
|
| 3. | Does net income using weighted average fall between that usingFIFO and LIFO? | ||||
|
| 4. | If costs were rising instead of falling, which method wouldyield the highest net income? | ||||||||
|
Related questions
| Laker Company reported thefollowing January purchases and sales data for its onlyproduct. |
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||||||
| Jan. | 1 | Beginning inventory | 190 | units | @ $7.80 | = | $ | 1,482 | ||||||||
| Jan. | 10 | Sales | 110 | units | @$15.80 | |||||||||||
| Jan. | 20 | Purchase | 260 | units | @ $6.80 | = | 1,768 | |||||||||
| Jan. | 25 | Sales | 185 | units | @$15.80 | |||||||||||
| Jan. | 30 | Purchase | 130 | units | @ $5.80 | = | 754 | |||||||||
| Totals | 580 | units | $ | 4,004 | 295 | units | ||||||||||
Laker uses a perpetual inventory system. For specificidentification, ending inventory consists of 285 units, where 130are from the January 30 purchase, 80 are from the January 20purchase, and 75 are from beginning inventory. |
| 1. | Complete comparative income statements for the month of Januaryfor Laker Company for the four inventory methods. Assume expensesare $2,000, and that the applicable income tax rate is 35%.(Do not round your Intermediate calculations.) |
| 2. | Which method yields the highest net income? | ||||||||
|
| 3. | Does net income using weighted average fall between that usingFIFO and LIFO? | ||||
|
| 4. | If costs were rising instead of falling, which method wouldyield the highest net income? | ||||||||
|
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 | 180 units @ $10.50 = $1,890 | |
| Jan. 10 | Sales | 120 units @ $19.50 | |
| Jan. 20 | Purchase | 110 units @ $9.50 = 1,045 | |
| Jan- 25 | Sales | 150 units @ $19.50 | |
| Jan 30 | Purchase | 260 units @ $9.00 = 2,340 | |
| Totals | 550 units - $5,275 | 270 units |
The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 260 are from the January 30 purchase. 5 are from the January 20 purchase, inventory al inventory system.
Required
1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are S1.650, and that the applicable income tax rate is 40%. (Round your intermediate calculations to 2 decimal places.)
2. Which method yields the highest net income?
_____ Specific identification
_____ LIFO
_____ Weighted average
_____ FIFO
3. Does net income use a weighted average fall between that using FIFO and LIFO?
