Tom Brady Shop began operations on January 2, 2022. The following stock record card for footballs was

Question:

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?

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Related Book For  book-img-for-question

Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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