taylor corporation has used a periodic inventoey system and

Problem 8-4 Various inventory transactions; determining inventory and cost of goods [L08-1, 8-2, 8-3, 8- Johnson Corporation began 2018 with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a a Purchased 50,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 00% of the purchases were pald for within the 10-day to record purchase discounts. The s of $0.50 per unit were paid by etuned before Johnson had paid b. 1000 units during was also given a cash refund for the freight charges of $0.50 per unit it had paid on the original The units were c. Sales for the year totaled 45,000 units at $18 per unit d. On 5,000 additional units at $10 each. The goods were shipped fo.b. destination and arrived at e. 14,000 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. before income taxes for 2018.

Solution

1 Units CPU Opening Balance 10000 8 Purchase (Gross) 50000 10.5 Purchase return -1000 10.5 Sales -45000 10.5 Closing Stock 14000 8.71 ((10000*8)+(4000*10.5))/14000 Cost of Goods Sold        4,72,500 (45000*10.5) 2 Sale    8,10,000 Discount Received          9,800 Cost of Goods Sold -4,72,500 Income Before Tax    3,47,300