Johnson Corporation began the year with inventory of 10,000 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:Purchased 50,000 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 $0.50 per unit were paid by Johnson.1,000 units purchased during the year were returned to suppliers for credit. Johnson was also given credit for the freight charges of $0.50 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received. Sales for the year totaled 45,000 units at $18 per unit. On December 28, Johnson purchased 5,000 additional units at $10 each. The goods were shipped f. o.b. destination and arrived at Johnson’s warehouse on January 4 of the following year.14,000 units were on hand at the end of the year.