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Jillet Corporation began the year with inventory of 1 3 , 0 0 0 units of its only product. The units cost $ 8 each.

Jillet Corporation began the year with inventory of 13,000 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 65,000 additional units at a cost of $10 per unit. Terms of the purchases were 210,n30. 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.1,300 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 60,000 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 5,300 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.16,700 units were on hand at the end of the year.
Required:
Determine ending inventory and cost of goods sold at the end of the year.
Assuming that operating expenses other than those indicated in the above transactions amounted to $156,000, determine
income before income taxes for the year.
For financial reporting purposes, the company uses LIFO (amounts based on a periodic inventory system). Record the year-end
adjusting entry for the LIFO reserve, assuming the balance in the LIFO reserve at the beginning of the year is $15,600.
Determine the amount the company would report as income before taxes for the year under LIFO. Operating expenses other
than those indicated in the above transactions amounted to $156,000.
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