Jillet Corporation began the year with inventory of 16,000 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: a. Purchased 80,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30. The company uses the gross method to record purchase discounts. The inventory was purchased f.o.b. shipping point and additional freight costs of $0.50 per unit were charged to Jillet. b. 1,600 units purchased during the year were returned to suppliers for credit. Jillet was also given credit for the freight charges of $0.50 per unit on the original purchase. The units were defective and were returned two days after they were received. The remaining inventory was paid within the discount period. (Hint: The discount applies only to inventory and not the freight.) c. Sales for the year totaled 75,000 units at $18 per unit. (Hint: The cost of the inventory sold includes the purchase cost of those units plus freight less purchase discount.) d. On December 28, Jillet purchased 5,600 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at Jillet's warehouse on January 4 of the following year. e. 19,400 units were on hand at the end of the year.

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Chapter1: Financial Statements And Business Decisions
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1. Determine ending inventory and cost of goods sold at the end of the year.
2. Assuming that operating expenses other than those indicated in the above transactions amounted to $162,000, determine
income before income taxes for the year.
Transcribed Image Text:1. Determine ending inventory and cost of goods sold at the end of the year. 2. Assuming that operating expenses other than those indicated in the above transactions amounted to $162,000, determine income before income taxes for the year.
Jillet Corporation began the year with inventory of 16,000 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:
a. Purchased 80,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30. The company uses the gross
method to record purchase discounts. The inventory was purchased f.o.b. shipping point and additional freight costs of $0.50
per unit were charged to Jillet.
b. 1,600 units purchased during the year were returned to suppliers for credit. Jillet was also given credit for the freight charges of
$0.50 per unit on the original purchase. The units were defective and were returned two days after they were received. The
remaining inventory was paid within the discount period. (Hint: The discount applies only to inventory and not the freight.)
c. Sales for the year totaled 75,000 units at $18 per unit. (Hint: The cost of the inventory sold includes the purchase
cost of those units plus freight less purchase discount.)
d. On December 28, Jillet purchased 5,600 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at
Jillet's warehouse on January 4 of the following year.
e. 19,400 units were on hand at the end of the year.
Transcribed Image Text:Jillet Corporation began the year with inventory of 16,000 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: a. Purchased 80,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30. The company uses the gross method to record purchase discounts. The inventory was purchased f.o.b. shipping point and additional freight costs of $0.50 per unit were charged to Jillet. b. 1,600 units purchased during the year were returned to suppliers for credit. Jillet was also given credit for the freight charges of $0.50 per unit on the original purchase. The units were defective and were returned two days after they were received. The remaining inventory was paid within the discount period. (Hint: The discount applies only to inventory and not the freight.) c. Sales for the year totaled 75,000 units at $18 per unit. (Hint: The cost of the inventory sold includes the purchase cost of those units plus freight less purchase discount.) d. On December 28, Jillet purchased 5,600 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at Jillet's warehouse on January 4 of the following year. e. 19,400 units were on hand at the end of the year.
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