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Laker Company reported the following January purchases and sales data for its only product. The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 190 units from the January 30 purchase, 5 units from the January 20 purchase, and 20 units from beginning inventory. Compute gross profit for the month of January for Laker Company for the four inventory methods.

Respuesta :

The gross profit for the four inventory methods include:

  • Specific identification - $3785
  • Weighted average - $3774
  • FIFO - $3770
  • LIFO - $3790

How to calculate the gross profit

From the complete question, the following can be deduced:

Specific identification

Sales = $9800

Less: Cost of goods sold = $6015

Gross profit = $3785

Weighted average

Sales = $9800

Less: Cost of goods sold = $6026

Gross profit = $3774

FIFO

Sales = $9800

Less: Cost of goods sold = $6030

Gross profit = $3770

LIFO

Sales = $9800

Less: Cost of goods sold = $6010

Gross profit = $3790

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