PROBLEM 40: 000 Company uses the retail inventory method. At the end of the current year,000 Company suffered a fire loss that destroyed most of its inventory. After the fire, onlygoods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000was salvaged. The following information is available prior to the fire:CostRetailP 1,100,00015,800,000540,000600,000300,000400,000Beginning inventoryPurchasesP 2,200,00026,300,000Freight inPurchase returnsPurchase allowances1,000,000800,000300,000100,000900,000800,00050,00024,700,000350,000200,000100,000600,0005% of salesDepartmental transfer inMarkupsCancelation of markdownDepartmental transfer outMarkdownsCancelation of markupSalesSales returnsSales discounts350,000Sales allowancesEmployee disCountsNormal wastage33. What is the estimated fire loss if O0O Company applies the conservative retail approach?34. What is the estimated cost of goods sold if OO 0 Company applies the FIFO retailapproach?35. What is the estimated ending inventory if O00 Company applies the average costapproach

Inventory is the working asset held by the business for too less time. It is the asset which…

33. What is the estimated fire loss if O0O Company applies the conservative retail approach? 34. What is the estimated cost of goods sold if OO 0 Company applies the FIFO retail approach? 35. What is the estimated ending inventory if O00 Company applies the average cost

33. What is the estimated fire loss if O0O Company applies the conservative retail approach? 34. What is the estimated cost of goods sold if OO 0 Company applies the FIFO retail approach? 35. What is the estimated ending inventory if O00 Company applies the average cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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PROBLEM 40: 000 Company uses the retail inventory method. At the end of the current year,
000 Company suffered a fire loss that destroyed most of its inventory. After the fire, only
goods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000
was salvaged. The following information is available prior to the fire:
Cost
Retail
P 1,100,000
15,800,000
540,000
600,000
300,000
400,000
Beginning inventory
Purchases
P 2,200,000
26,300,000
Freight in
Purchase returns
Purchase allowances
1,000,000
800,000
300,000
100,000
900,000
800,000
50,000
24,700,000
350,000
200,000
100,000
600,000
5% of sales
Departmental transfer in
Markups
Cancelation of markdown
Departmental transfer out
Markdowns
Cancelation of markup
Sales
Sales returns
Sales discounts
350,000
Sales allowances
Employee disCounts
Normal wastage
33. What is the estimated fire loss if O0O Company applies the conservative retail approach?
34. What is the estimated cost of goods sold if OO 0 Company applies the FIFO retail
approach?
35. What is the estimated ending inventory if O00 Company applies the average cost
approach

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