Tom Brady Shop began operations on January 2, 2022. The following stock record card for footballs was taken from the records at the end of the year.

A physical inventory on December 31, 2022, 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.

Instructions

a. Compute the December 31, 2022, inventory using the FIFO method. (Round all unit costs to two decimal places.)

b. Compute the 2022 cost of goods sold using the LIFO method.

c. What method would you recommend to the owner to minimize income taxes in 2022, using the inventory information for footballs as a guide?

Transcribed Image Text:

Date Voucher Terms Units Unit Invoice Gross Invoice Received Cost Amount 1/15 10624 Net 30 50 $20 $1,000 3/15 11437 1/5, net 65 16 1,040 30 6/20 21332 1/10, net 90 15 1,350 30 9/12 27644 1/10, net 84 1,008 30 11/24 31269 1/10, net 76 11 836 30 Totals 365 $5,234 12