Brady Sports began operations on January 2, 2020. The following stock record card for footballs was taken from the records at the end of the year.

A physical inventory on December 31, 2020, reveals that 100 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Brady Sports uses the invoice price less discount for recording purchases.

Instructions

a. Compute the December 31, 2020, inventory using the FIFO method.

b. Compute the 2020 cost of goods sold using the LIFO method.

c. What method would you recommend to the owner to minimize income taxes in 2020, using the inventory information for footballs as a guide?

Transcribed Image Text:

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