Howie Long Shop began operations on January 2, 2008. The following stock record card for footballs was taken from the records at the end of the year.
A physical inventory on December 31, 2008, reveals that 100 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Howie Long Shop uses the invoice price less discount for recording purchases.
(a) Compute the December 31, 2008, inventory using the FIFO method.
(b) Compute the 2008 cost of goods sold using the LIFO method.
(c) What method would you recommend to the owner to minimize income taxes in 2008, using the inventory information for footballs as aguide?