E8-20B (FIFO and LIFO—Periodic) ProSports Shop began operations on January 2, 2014. The following stock record card for soccer balls was taken from the records at the end of the year.

E8-20B (FIFO and LIFO—Periodic) ProSports Shop began operations on January 2, 2014. The following

stock record card for soccer balls was taken from the records at the end of the year.

                                                                Units           Unit Invoice     Gross Invoice

Date               Voucher       Terms         Received          Cost                Amount

1/6               10624            Net 30            100                 $10                 $1,000

3/8               11437           2/10, net 30      60                   11                      660

7/2               21332           1/10, net 30      40                   13                      520

8/5               27644           1/10, net 30    180                   12                   2,160

10/21           31269           2/5    net 30    105                   10                   1,050

Totals 485 $5,390

A physical inventory on December 31, 2014, reveals that 125 were in stock. The bookkeeper informs you that all the discounts were taken. Assume that ProSports Shop uses the invoice price less discount for recording purchases.

Instructions

(a) Compute the December 31, 2014, inventory using the FIFO method.

(b) Compute the 2014 cost of goods sold using the LIFO method.

(c) What method would you recommend to the owner to minimize income taxes in 2014, using the inventory information for soccer balls as a guide?