Hello me with the following

johnson corporation began 2016 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 2016:

a.
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 purchased f. o.b. shipping point and freight charges of $0.40 per unit were paid by johnson.

You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.

Explanation:

Determination of the cost of the ending inventory (LIFO cost method):

Beginning inventory (17,000 x$9)                                            $153,000

Add: Purchases

Purchases (85,000 x$10)                                      $850,000

Less: Returns (1,700 x $10.40)                                  -$17,680

Less: Discount [2% of $10 x (85,000 -1,700)]          -$16,660

Add: Freight-in (85,000 x $0.40)                               $34,000           $849,660

Cost of goods available for sale (17,000 + 83,300)                           $1,002,660

Less: Ending inventory                                                                      $186,660

Cost of Goods Sold                                                                            $816,000

Note: The 5,700 units purchased on December 28, 2016 were not included as the shipment (FOB destination) did not reach the warehouse before December 31, 2016.

Determination of the ending inventory:

Date of purchase         units                unit cost          Total Cost

Beginning inventory   17,000             $9                    $153,000

2016 Purchases           3,300               $10.20             $33,660

Total                           20,300             ---                    $186,660

Note:

Inventory available for sale 17,000 + 83,300 =100,300

Sales for the year 80,000 units

Ending inventory in units                   20,300

Unit cost of purchases is determined as follows,

$10 less 2% discount + freight-in charges of $0.40

98% of $10 + $0.40 = $9.80 + $0.40 =$10.20

Requirement 2

Sales (80,000 x $18)                           $1,440,000

Less: Cost of goods sold                    $816,000

Gross profit                                        $624,000

Less: Other operating expenses         $164,000

Income before income taxes             $460,000

Hence, income before income taxes for 2016 is $460,000

answer; the correct answer is (0.08);

answer; standing committee;