Johnson Corporation began 2016 with inventory of 10,000 units of its only product. The units cost...

Johnson Corporation began 2016 with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2016:

a. Purchased 50,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b. shipping point and freight charges of $.50 per unit were paid by Johnson.

b. 1,000 units purchased during the year were returned to suppliers for credit. Johnson was also given credit for the freight charges of $.50 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received.

c. Sales for the year totaled 45,000 units at $18 per unit.

d. On December 28, 2016, Johnson purchased 5,000 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at Johnson's warehouse on January 4, 2017.

e. 14,000 units were on hand at the end of 2016.

Required:

1. Determine ending inventory and cost of goods sold for 2016.

2. Assuming that operating expenses other than those indicated in the above transactions amounted to $150,000, determine income before income taxes for 2016.

Solutions

Expert Solution

ekkarill92 answered 8 months ago

Next > < Previous

Related Solutions

Johnson Corporation began 2018 with inventory of 19,000 units of its only product. The units cost...

Johnson Corporation began 2018 with inventory of 19,000 units of its only product. The units cost $7 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2018: Purchased 95,000 additional units at a cost of $10 per unit. Terms of the purchases were 3/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was...

Johnson Corporation began 2018 with inventory of 17,000 units of its only product. The units cost...

Johnson Corporation began 2018 with inventory of 17,000 units of its only product. The units cost $9 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2018: Purchased 85,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was...

Johnson Corporation began the year with inventory of 13,000 units of its only product. The units...

Johnson Corporation began the year with inventory of 13,000 units of its only product. The units cost $9 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: Purchased 65,000 additional units at a cost of $12 per unit. Terms of the purchases were 3/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The...

Johnson Corporation began the year with inventory of 13,000 units of its only product. The units...

Johnson Corporation began the year with inventory of 20,000 units of its only product. The units...

Johnson Corporation began the year with inventory of 20,000 units of its only product. The units cost $9 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: Purchased 100,000 additional units at a cost of $12 per unit. Terms of the purchases were 2/10, n/30, and 80% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The...

Johnson Corporation began the year with inventory of 30,000 units of its only product. The units...

Johnson Corporation began the year with inventory of 30,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: Purchased 150,000 additional units at a cost of $10 per unit. Terms of the purchases were 1/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The...

Johnson Corporation began the year with inventory of 12,000 units of its only product. The units...

Johnson Corporation began the year with inventory of 12,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: Purchased 60,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 90% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The...

ohnson Corporation began 2018 with inventory of 17,000 units of its only product. The units cost...

ohnson Corporation began 2018 with inventory of 17,000 units of its only product. The units cost $9 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2018: Purchased 85,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was...

Marigold Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the...

Marigold Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of $20 per unit. None of this inventory was sold in 2016. Relevant information for fiscal 2017 is as follows: Ending inventory units: December 31, 2016 120 December 31, 2017, by purchase date —Dec. 2, 2017 120 —July 20, 2017 31 151 During 2017, the following purchases and sales were made: Purchases Sales Mar....

Triton Manufacturing Company began June 2016 with 10,000 units of inventory in process, 20 percent completed....

Triton Manufacturing Company began June 2016 with 10,000 units of inventory in process, 20 percent completed. During the period, 50,000 units were completed and transferred to the finished goods warehouse. Ending inventory consisted of 5,000 units, 70 percent completed. Materials were added at the beginning of the process. Required: Calculate the equivalent units for: I. Materials costs under the weighted average process cost method. II. Conversion costs under the weighted average process cost method. III. Materials costs under the FIFO...

Subjects