Reference no: EM131731977

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.