# Whispering Sports began operations on January 2, 2020. The following stock record card for footballs was...

Whispering 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 Units Received Voucher Date 1/15 61 Unit Invoice Cost \$26 21 20 16 Terms Net 30 1/5, net 30 1/10, net 30 1/10, net 30 1/10, net 30 10624 11437 21332 27644 31269 Totals 3/15 6/20 9/12 11/24 76 101 Gross Invoice Amount \$1,586 1,596 2,020 1,520 1,218 \$7.940 95 87 14 420 A physical inventory on December 31, 2020, reveals that 118 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Whispering Football Shop uses the invoice price less discount for recording purchases.
Compute the December 31, 2020, inventory using the FIFO method. (Round per unit and final answer to 2 decimal paces, eg. 35.57.) Ending Inventory using the FIFO method \$ e Textbook and Media Compute the 2020 cost of goods sold using the LIFO method. (Round per unit and final answer to 2 decimal paces, eg. 35.57.) Cost of Goods Sold using the LIFO method \$ e Textbook and Media What method would you recommend to the owner to minimize income taxes in 2020, using the inventory information for footballs as a guide?

1.FIFO

• First Out (FIFO) is an accounting method in which assets purchased or acquired first are disposed of first. FIFO assumes that the remaining inventory consists of items purchased last.
• We have 118 football in stock which as per FIFO consist of 87 which where purchased in november and 31 which were purchased in September.
• Value of closing Stock
• 87 Footballs purchsed in November    87 * \$14 = \$1,218
• 31 Footballs purchsed in September 31 * \$16 = \$496
• Total Value as on 31 December, 2020 \$1,714

2.LIFO

• LIFO is an accounting method in which assets purchased or acquired last are disposed of first.LIFO assumes that the remaining inventory consists of items purchased earlier.
• We have 118 football in stock which as per FIFO consist of 61 which where purchased in January and 57 which were purchased in March.
• Value of closing Stock
• 61 Footballs purchsed in January   61 * \$26 = \$1,586
• 57 Footballs purchsed in March 57 * \$21 = \$1,197
• Total Value as on 31 December, 2020   \$2,783
• Value of Cost of goods sold
• = Gross Invoice amount - Value of closing stock
• = \$7,940 - \$2,783 = \$5,157

3.Method reccomendation

• FIFO, as its has lower value of stock as compared to LIFO.
##### Add Answer of: Whispering Sports began operations on January 2, 2020. The following stock record card for footballs was...
Similar Homework Help Questions
• ### how can I solve these two questions? Current Anemprin Progress Crane Sports began operations on January...

how can I solve these two questions? Current Anemprin Progress Crane 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. Units Received Unit Invoice Cost \$22 Gross Invoice Amount \$1,122 1,188 Date 1/15 3/15 6/20 9/12 11/24 Voucher 10624 11437 21332 27644 31269 Totals Terms Net 30 1/5, net 30 1/10, net 30 1/10, net 30 1/10, net 30 1,547 1,105 924 \$5.886 77...

• ### CALCULATOR FULL SCREEN PRINTER VERSION Blossom Football Shop began operations on January 2, 2017. The following...

CALCULATOR FULL SCREEN PRINTER VERSION Blossom Football Shop began operations on January 2, 2017. The following stock record card for footballs was taken from the records at the end of the year. BACK Date Voucher Units Received Unit Invoice Cost Gross Invoice Amount 1/15 3/15 6/20 9/12 11/24 Terms Net 30 1/5, net 30 1/10, net 30 1/10, net 30 1/10, net 30 10624 11437 21332 27644 31269 Totals 108 \$1,972 1.909 2,376 1,734 102 1.504 \$9.495 A physical inventory...

• ### E8.23 (LO3,5) (FIFO and LIFO—Periodic) Tom Brady Shop began operations on January 2, 2019. The following...

E8.23 (LO3,5) (FIFO and LIFO—Periodic) Tom Brady Shop began operations on January 2, 2019. 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  50 \$20 \$1,000  3/15 11437 1/5, net 30  65  16  1,040  6/20 21332 1/10, net 30  90  15  1,350  9/12 27644 1/10, net 30  84  12  1,008 11/24 31269 1/10, net 30  76  ...

• ### * Question 6 Bramble Limited stocks a variety of sports equipment for sale to institutions. The following stock...

* Question 6 Bramble Limited stocks a variety of sports equipment for sale to institutions. The following stock record card for basketballs was taken from the records at the December 31, 2020 year end: Terms Units Received Unit Invoice Cost \$20 Net 30 120 Invoice Date Number Jan. 1 balance 1510624 Mar. 15 11437 June 20 21332 Cross Invoice Amount \$2,400 1,400 1,280 Net 30 1/5, net 30 1/10, net 110 1,650 Sept. 27644 1/10, net 1,200 30 Nov. 24...

• ### Whispering Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of...

Whispering Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company's merchand ise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of \$37,500 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear...

• ### Lyon Center began operations on July 1. It uses a perpetual inventory system. During July, the...

Lyon Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales. Purchases Date Sales Units Units 7 Unit Cost \$62 July 1 July 6 July 11 3 \$66 July 14 July 21 July 27 Calculate average cost for each unit. (For calcula rs purpose round unit costs to 2 decimal places, eg. 15.25.) July 1 \$ July 6 \$ Determine the ending inventory under a perpetual inventory system...

• ### Vaughn Company's record of transactions for the month of April was as follows. Purchases April 1...

Vaughn Company's record of transactions for the month of April was as follows. Purchases April 1 (balance on hand) 1,140 @ \$6.00 2,850 @ 6.08 1,520 @ 6.40 2,280 @ 6.50 1,330 @ 6.60 950 @ 6.79 10,070 Sales April 3 950 @ \$10.00 9 2,660 @ 10.00 11 1,140 @ 11.00 23 2,280 @ 11.00 27 1,710 @ 12.00 8,740 Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit. (Round answer to 2...

• ### Blue Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the...

Blue Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of \$25 per unit. None of this inventory was sold in 2019. Relevant information is as follows. Ending inventory units    December 31, 2019 122    December 31, 2020, by purchase date       December 2, 2020 122       July 20, 2020 50 172 During the year 2020, the following purchases and sales were made. Purchases Sales March 15...

Free Homework App