9. On October 31, 2020, ABC Company reported that a flood caused severe damage to the entire inventory. Based on recent history, the entity has a gross profit of 33 1/3% on cost. The following information is available from the records for ten months ended October 31, 2020: Inventory, January1 P520,000 4,120,000 60,000 5,700,000 500,000 Purchases Purchase returns and allowances Sales Sales returns and allowances The physical inventory count revealed goods that were safe from the flood with cost of P70,000. Using the gross profit method, what is the estimated amount of inventory damaged by the flood as of October 31, 2020?
9. On October 31, 2020, ABC Company reported that a flood caused severe damage to the entire inventory. Based on recent history, the entity has a gross profit of 33 1/3% on cost. The following information is available from the records for ten months ended October 31, 2020: Inventory, January1 P520,000 4,120,000 60,000 5,700,000 500,000 Purchases Purchase returns and allowances Sales Sales returns and allowances The physical inventory count revealed goods that were safe from the flood with cost of P70,000. Using the gross profit method, what is the estimated amount of inventory damaged by the flood as of October 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer number 9
![9. On October 31, 2020, ABC Company reported that a flood caused severe damage to the entire
inventory. Based on recent history, the entity has a gross profit of 33 1/3% on cost. The following
information is available from the records for ten months ended October 31, 2020:
Inventory, January 1
Purchases
P520,000
4,120,000
60,000
5,700,000
500,000
Purchase returns and allowances
Sales
Sales returns and allowances
The physical inventory count revealed goods that were safe from the flood with cost of P70,000.
Using the gross profit method, what is the estimated amount of inventory damaged by the flood
as of October 31, 2020?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6e10c9f6-26eb-4de2-9d67-77d7505937ce%2F4eb86e07-e146-4a84-b453-10e29a9448b5%2F6y77dd9_processed.png&w=3840&q=75)
Transcribed Image Text:9. On October 31, 2020, ABC Company reported that a flood caused severe damage to the entire
inventory. Based on recent history, the entity has a gross profit of 33 1/3% on cost. The following
information is available from the records for ten months ended October 31, 2020:
Inventory, January 1
Purchases
P520,000
4,120,000
60,000
5,700,000
500,000
Purchase returns and allowances
Sales
Sales returns and allowances
The physical inventory count revealed goods that were safe from the flood with cost of P70,000.
Using the gross profit method, what is the estimated amount of inventory damaged by the flood
as of October 31, 2020?
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