The following information applies to the questions displayed below.]

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 245 units, where 210 are from the January 30 purchase, 5 are from the January 20 purchase, and 30 are from beginning inventory.

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Exercise 5-3 Perpetual: Inventory costing methods LO P1

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 345 units, where 310 are from the January 30 purchase, 5 are from the January 20 purchase, and 30 are from beginning inventory.

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Required information

[The following information applies to the questions displayed below.]

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 315 units, where 290 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory.

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

P16.9 (LO 4) (EPS with Stock Dividend and Discontinued Operations) Christina Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Christina employs a fiscal year ending May 31.

Income from operations before income taxes for Christina was $1,400,000 and $660,000, respectively, for fiscal years ended May 31, 2021 and 2020. Christina experienced a loss from discontinued operations of $400,000 on March 3, 2021. A 20% combined income tax rate pertains to any and all of Christina Corporation's profits, gains, and losses.

Christina's capital structure consists of preferred stock and common stock. The company has not issued any convertible securities or warrants and there are no outstanding stock options.

Christina issued 40,000 shares of $100 par value, 6% cumulative preferred stock in 2017. All of this stock is outstanding, and no preferred dividends are in arrears.

There were 1,000,000 shares of $1 par common stock outstanding on June 1, 2019. On September 1, 2019, Christina sold an additional 400,000 shares of the common stock at $17 per share. Christina distributed a 20% stock dividend on the common shares outstanding on December 1, 2020. These were the only common stock transactions during the past 2 fiscal years.

Instructions
Determine the weighted-average number of common shares that would be used in computing earnings per share on the current comparative income statement for:
The year ended May 31, 2020.
The year ended May 31, 2021.
Starting with income from operations before income taxes, prepare a comparative income statement for the years ended May 31, 2021 and 2020. The statement will be part of Christina Corporation's annual report to stockholders and should include appropriate earnings per share presentation.
The capital structure of a corporation is the result of its past financing decisions. Furthermore, the earnings per share data presented on a corporation's financial statements is dependent upon the capital structure.
Explain why Christina Corporation is considered to have a simple capital structure.
Describe how earnings per share data would be presented for a corporation that has a complex capital structure.

Progressive Inc. (Progressive) is an investment company that recently raised $3,000,000 from a public financing. The Board of Directors has instructed the CFO to invest up to $2,000,000 in investments that it intends to actively trade and therefore will account for these investments at fair value through profit or loss.

On the advice of the company’s investment advisor, the following shares were purchased in October 2019:

During December 2019, Progressive received cash dividends of $40,000 from its investment in Monarch Bank of Canada.

In 2020, the following transactions took place:

January 25 50,000 shares of Leslee Resources Ltd. were purchased for $125,000.

May 17 6,000 shares of Monarch Bank of Canada were sold at $45 per share

June 17 75,000 shares of Lucky Limited were purchased at $15 per share

September 25 100,000 shares of Leslee Resources Ltd. were sold for net proceeds (i.e. after commissions) for $165,000. (For the purposes of determining the cost of shares sold, use the weighted average cost).

As part of its banking arrangement, the company pays no commissions on the purchase of shares but is charged a 2% commission on the sale of all investments.

Market Price of investments – presented on a per share basis

Required:

a) Prepare all journal entries relating to these investments for 2019.

b) Prepare all journal entries relating to these investments for 2020.

c) Briefly discuss why these investments are valued at current market value while other assets such as property, plant and equipment are not adjusted to fair market value.

Problem 23-08

Comparative balance sheet accounts of Oriole Company are presented below.

Additional data:

Oriole’s 2020 income statement is as follows.

(a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Prepare a statement of cash flows using the indirect method.

You have been asked to perform and present a stock valuation to the CEO prior to the annual shareholders meeting next week. The two models you have selected to value the firm are the dividend discount model and the discounted cash flow model. Explain why the estimates from the two valuation methods differ. Address the assumptions implicit in the models themselves as well as those you made during the valuation process.

You have been asked to perform and present a stock valuation to the CEO prior to the annual shareholders meeting next week. The two models you have selected to value the firm are the dividend discount model and the discounted cash flow model. Explain why the estimates from the two valuation methods differ. Address the assumptions implicit in the models themselves as well as those you made during the valuation process.

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 95 units from beginning inventory and 225 units from the March 5 purchase; the March 29 sale consisted of 75 units from the March 18 purchase and 115 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)