Question

Problem 8-4 Various inventory transactions, determining inventory and cost of goods (LO8-1,8-2, 8-3, 8- Johnson Corporation began 2018 with inventory of 15.000 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 2018 a. Purchased 80.000 additional units at a cost of $12 per unit. Terms of the purchases were 2/10./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 to b shipping point and freight charges of $0.50 per unit were paid by Johnson b. 1600 units purchased during the year were returned to suppliers for credit Johnson was also given credit for the freight charges of $0.50 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received Sales for the year totaled 75.000 units at $17 per unit d. On December 28, 2018, Johnson purchased 5,600 additional units at $12 each The goods were shipped ob destination and arrived at Johnson's warehouse on January 4, 2019 e. 19.400 units were on hand at the end of 2018 Required 1. Complete the below table to determine the ending inventory and cost of goods sold for 2018 2. Assuming the operating expenses other than those indicated in the above transactions amounted to $162.000 determine income before income taxes for 2018 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the below table to determine the ending inventory and cont calculations. Amounts to be deducted should be indicated with mi n de la foron ) begin to 2018 purchases Beginning inventory S 178 Purchase in cont (15600) Regold 2

I want to find the 2018 purchases.

I don't know any information. I only know that my ending inventory needs a plug and it has something to do with knowing the purchases for 2018. I have attached a similar problem.

Notice the 2018 purchases 41,200 when it is added to the 80,000 beginning inventory it makes the bottom part less (121,200) coming from the cost of goods available for sale giving the needed cost of goods sold 453,500 afterwards being used to calculate income before income taxes.

Answer 1

Johnson Corporation Requirement 1 Requirement 2 Sales (75,000 units x $17.00) 1275000 Beginning inventory 128000 2018 purchases 41684 Less: Cost of goods sold (above) Ending inventory 169684 919500 Other operating expenses 162000 -1081500 Income before income taxes 193500 128000 Beginning inventory Net purchases: Purchases 960000 Returns -20000 Purchase discounts -18816 Freight-in 40000 961184 Cost of goods available for sale 1089184 Less: Ending inventory Cost of goods sold -169684 919500 Beginning inventory (16,000 x $8.00) 128000 Net purchases: Purchases (80,000* units x $12) Less: Returns (1,600 units x $12.50) Less: Purchase discounts ($940,800 x 2%) Plus: Freight-in (80,000 units x $0.50) 960000 -20000 -18816 40000 961184 Cost of goods available (100,300 units) 1089184 Less: Ending inventory (below) -169684 Cost of goods sold 919500 The 5,700 units purchased on December 28 are not included. The merchandise was shipped f.o.b. destination and did not arrive at Johnson's warehouse until 2019 Cost of ending inventory: Date of Purchase Unit cost Total Cost Units Beg. Inventory 128000 16000 3400 41684 2019 12.26 Total 19400 169684 **$12 x 98% = $9.80 +0.50 in freight charges $12.26