Problem - Tom Brady Football Shop began operations on January 2, 2016. The following stock record card for footballs was taken from the records at the end of the year.
Date Voucher Terms Units Received Unit Invoice Cost Gross Invoice Amount
1/15 10624 Net 30 56 $24.00 $1,344
3/15 11437 1/5, net 30 71 19.00 1,349
6/20 21332 1/10, net 30 96 18.00 1,728
9/12 27644 1/10, net 30 90 14.00 1,260
11/24 31269 1/10, net 30 82 13.00 1,066
Total 395 $6747
A physical inventory on December 31, 2016, reveals that 133 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, 2016, inventory using the FIFO method.
(b) Compute the 2016 cost of goods sold using the LIFO method.
(c) What method would you recommend to the owner to minimize income taxes in 2016, using the inventory information for footballs as a guide?
Please explain step by step using FIFO Method to find Ending Inventory and also compute the 2016 cost of goods sold using the LIFO method. Since this question different than other question that include with discount.