Johnson Corporation began the year with inventory of 22,000 units of its only product. The units cost $7 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year:

1. Purchased 110,000 additional units at a cost of $12 per unit. The 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 $0.40 per unit were paid by Johnson.
2. 2,200 units purchased during the year were returned to suppliers for credit. Johnson was also given credit for the freight charges of $0.40 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received.
3. Sales for the year totaled 105,000 units at $19 per unit.
4. On December 28, Johnson purchased 6,200 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at Johnson’s warehouse on January 4 of the following year.
5. 24,800 units were on hand at the end of the year.

Required:

1. Determine ending inventory and cost of goods sold at the end of the year. Assuming that operating expenses other than those indicated in the above transactions amounted to $174,000, determine income before income taxes for the year. For financial reporting purposes, the company uses LIFO (amounts based on a periodic inventory system). Record the year-end adjusting entry for the LIFO reserve, assuming the balance in the LIFO reserve at the beginning of the year is $15,000. Determine the amount the company would report as income before taxes for the year under LIFO. Operating expenses other than those indicated in the above transactions amounted to $174,000.
   

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Required 1 Required 2 Required 3 Required 4 Determine ending inventory and cost of goods sold at the end of the year. Ending inventory 301,568 IS Cost of goods sold $ 1,276,800 Required 1 Required 2 Required 3 Required 4 Assuming that operating expenses other than those indicated in the above transactions amounted to $174,000, determine income before income taxes for the year. Income before income $ 635.720 taxes Required 1 Required 2 Required 3 Required 4 For financial reporting purposes, the company uses LIFO (amounts based on a periodic inventory system). Record the year- end adjusting entry for the LIFO reserve, assuming the balance in the LIFO reserve at the beginning of the year is $17,400. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Required 1 Required 2 Required 3 Required 4 Determine the amount the company would report as income before taxes for the year under LIFO. Operating expenses other than those indicated in the above transactions amounted to $174,000. Income before income taxes under LIFO Required 1 Required 2 Required 3 Required 4 Determine ending inventory and cost of goods sold at the end of the year. Ending inventory 301,568 IS Cost of goods sold $ 1,276,800 Required 1 Required 2 Required 3 Required 4 Assuming that operating expenses other than those indicated in the above transactions amounted to $174,000, determine income before income taxes for the year. Income before income $ 635.720 taxes Required 1 Required 2 Required 3 Required 4 For financial reporting purposes, the company uses LIFO (amounts based on a periodic inventory system). Record the year- end adjusting entry for the LIFO reserve, assuming the balance in the LIFO reserve at the beginning of the year is $17,400. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit Required 1 Required 2 Required 3 Required 4 Determine the amount the company would report as income before taxes for the year under LIFO. Operating expenses other than those indicated in the above transactions amounted to $174,000. Income before income taxes under LIFO

Answer rating: 100% (QA)

1 Determine ending inventory and cost of goods sold at the end of the year We will use the FIFO method to determine the ending inventory and cost of g... View the full answer