# Units unit cost units sold unit cost cogs units sold

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Chapter 14 / Exercise C2
Introductory Econometrics: A Modern Approach
Wooldridge
Expert Verified
UnitsUnit CostUnits SoldUnit CostCOGSUnits SoldUnit CostCOGSUnits in Ending InventoryUnit CostEnding Inventory ValueBeginning Inv. 140\$6.00100\$6.00\$60040\$6.00\$2400\$6.00\$0Purchases:Jan. 2060\$5.0040\$5.0020020\$5.00100Jan. 30180\$4.50180\$4.50810\$600\$440200\$910Cost of Goods Sold - January 10Cost of Goods Sold - January 25Ending InventoryPerpetual FIFO DateJan. 1Beginning inventory\$840Jan. 10Sales100 units @ \$15.00 = \$1,500Jan. 20Purchase300Jan. 25Sales80 units @ \$15.00 = \$1,200Jan. 30Purchase810380 units\$1,950180 units\$2,70060 units @ \$5.00 = 180 units @ \$4.50 = Units Acquired at CostUnits sold at RetailActivities140 units @ \$6.00 = SpecificWeightedIdentificationAverageFIFOLIFOSales\$2,700\$2,700\$2,700Cost of goods sold1,0251,0321,040Gross profit1,6751,6681,660Operating expenses1,2501,2501,250Income before tax425418410Income tax expense (40%)170167164Net income\$255\$251\$246Income StatementsFor Month Ended January 31Laker CompanyExercise 5-­‐4
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Chapter 14 / Exercise C2
Introductory Econometrics: A Modern Approach
Wooldridge
Expert Verified
5-5 Available for SaleDateUnitsUnit CostUnits SoldUnit CostCOGSUnits SoldUnit CostCOGSUnits in Ending InventoryUnit CostEnding Inventory ValueBeginning Inv.140\$6.00100\$6.00\$60020\$6.00\$12020\$6.00\$120Purchases:Jan. 2060\$5.0060\$5.003000\$5.000Jan. 30180\$4.50180\$4.50810\$600\$420200\$930Cost of Goods Sold - January 10Cost of Goods Sold - January 25Ending InventoryPerpetual LIFO TotalDateJan. 1Beginning inventory\$840Jan. 10Sales100 units @ \$15.00 = \$1,500Jan. 20Purchase300Jan. 25Sales80 units @ \$15.00 = \$1,200Jan. 30Purchase810380 units\$1,950180 units\$2,70060 units @ \$5.00 = 180 units @ \$4.50 = Units Acquired at CostUnits sold at RetailActivities140 units @ \$6.00 = SpecificWeightedIdentificationAverageFIFOLIFOSales\$2,700\$2,700\$2,700\$2,700Cost of goods sold1,0251,0321,0401,020Gross profit1,6751,6681,6601,680Operating expenses1,2501,2501,2501,250Income before tax425418410430Income tax expense (40%)170167164172Net income\$255\$251\$246\$258Income StatementsFor Month Ended January 31Laker CompanyExercise 5-­‐4
5-6 SpecificWeightedIdentificationAverageFIFOLIFOSales\$2,700\$2,700\$2,700\$2,700Cost of goods sold1,0251,0321,0401,020Gross profit1,6751,6681,6601,680Operating expenses1,2501,2501,2501,250Income before tax425418410430Income tax expense (40%)170167164172Net income\$255\$251\$246\$258Income StatementsFor Month Ended January 31Laker Company1. Which method yields the highest net income?