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what method would you recommend to the owner to minimize income taxes in 2012 using 645123

(FIFO and LIFO—Periodic) Tom Brady Shop began operations on January 2, 2012. 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

15 Jan

10624

Net 30

50

$20

$1,000

15 Mar

11437

1/5, net 30

65

16

1,040

20 Jun

21332

1/10, net 30

90

15

1,350

12 Sep

27644

1/10, net 30

84

12

1,008

24 Nov

31269

1/10, net 30

76

11

836

 

Totals

 

365

 

$5,234

A physical inventory on December 31, 2012, 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, 2012, inventory using the FIFO method.

(b) Compute the 2012 cost of goods sold using the LIFO method.

(c) What method would you recommend to the owner to minimize income taxes in 2012, using the inventory information for footballs as a guide?

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