1. Johnson Inc. began the year with $157,850 of accounts receivable. During the year, Johnson Inc. sold a considerable amount of merchandise on credit and collected $1,213,500 of its credit sales. At the end of the year, the accounts receivable balance is $8,400 higher than the beginning balance. Required: Calculate the amount of credit sales during the period (show workings). 2. Why are inventories written down to the lower of cost or net realizable value? 3. Describe how a company determines cost of goods sold.