Question

Novak Sports began operations on January 2, 2020. 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			75			$32			$2,400
3/15		11437		1/5, net 30			90			25			2,250
6/20		21332		1/10, net 30			115			24			2,760
9/12		27644		1/10, net 30			109			19			2,071
11/24		31269		1/10, net 30			101			17			1,717
		Totals					490						$11,198

A physical inventory on December 31, 2020, reveals that 119 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Novak Football Shop uses the invoice price less discount for recording purchases.

Compute the December 31, 2020, inventory using the FIFO method.

Ending Inventory using the FIFO method

$

Compute the 2020 cost of goods sold using the LIFO method.

Cost of Goods Sold using the LIFO method

$

What method would you recommend to the owner to minimize income taxes in 2020 based on the inventory info?

Answer 1