Whale Inc. was organized on January 1, 2020. December 31, 2021, the company lost most of itsinventory in a warehouse fire just before the year-end count of inventory was to take place. Thecompany's records disclosed the following data:20202021Inventory, Jan. 1204,000Purchases860,000692,000Purchase returns and allowance46,12064,600Sales788,000836,000Sales returns and allowances16,00020,000On January 1, 2021, Whale's pricing policy was changed so that the gross profit rate would be threepercentage higher than the one earned in 2020Salvaged undamaged merchandise was marked to sell at P24,000 while damaged merchandise markedto sell at P16,000 had an estimated realizable value of P3,600.REQUIRED:a. What is the company's gross profit rate beginning January 1, 2021?b. How much is the inventory fire lost?

a. Gross profit Rate for 2020 as, (Gross profit/ net sales) x 100 Net sales - cost of goods sold…

Answered: 860,000 692,000 ce 46,120 64,600…

Business

Accounting

860,000 692,000 ce 46,120 64,600 788,000 836,000 16,000 20,000

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

Whale Inc. was organized on January 1, 2020. December 31, 2021, the company lost most of its
inventory in a warehouse fire just before the year-end count of inventory was to take place. The
company's records disclosed the following data:
2020
2021
Inventory, Jan. 1
204,000
Purchases
860,000
692,000
Purchase returns and allowance
46,120
64,600
Sales
788,000
836,000
Sales returns and allowances
16,000
20,000
On January 1, 2021, Whale's pricing policy was changed so that the gross profit rate would be three
percentage higher than the one earned in 2020
Salvaged undamaged merchandise was marked to sell at P24,000 while damaged merchandise marked
to sell at P16,000 had an estimated realizable value of P3,600.
REQUIRED:
a. What is the company's gross profit rate beginning January 1, 2021?
b. How much is the inventory fire lost?

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