FIFO and LIFO?Periodic Tom Brady Shop began operations on January 2, 2010. The following stock record card for footballs was taken from the records at the end of the year. A physical inventory on December 31, 2010, reveals that 110 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Tom Brady Shop uses the invoice price less discount for recording purchases.

(a) Compute the December 31, 2010, inventory using the FIFO method.

(b) Compute the 2010 cost of goods sold using the LIFO method.

(c) What method would you recommend to the owner to minimize income taxes in 2010, using the inventory information for footballs as a guide?

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Unit Invoice Gross Invoice Amount Units Received Voucher 10624 11437 Terms Date Cost Net 30 1/5, net 30 1/10, net 30 1/10, net 30 1/10, net 30 $1,000 50 65 90 $20 1/15 1,040 1,350 1,008 836 $5,234 16 15 6/20 9/12 11/24 21332 27644 12 11 84 76 31269 Totals 365