Vicit Corp. manufactures steel parts for companies in the automotive and aeronautic industry. It makes all sales of its inventory on credit (i.e. all sales revenue is derived from credit sales), extending cash discounts with terms 2/10, n/30 and opportunities for sales returns within a 30-day window from the point of delivery. Vicit uses the gross method to account for cash discounts and the balance sheet method to account for its bad debt expense arising from uncollectible accounts.

Vicit uses straight-line methods to allocate costs for both its fixed and intangible assets. Factories are assigned a 30-year useful life, equipment a 5-year useful life and its patents have a 7-year useful life. The company anticipates no salvage on any of its long-term operating assets.