A fire wiped out Parvati Paper Company's Inventory.The insurance company will accept an estimate usingthe retail method. Last year's balance sheet stated thatthe ending inventory was $ 11 comma 000 and it wouldusually sell for $ 36 comma 000. Mr. Pichai knows thatthe cost of purchases was $ 180 comma 000 and theretail selling prices for the paper totalled $ 293 comma000. Credit card receipts indicate that there was $ 238comma 000 of sales since the beginning of the year.Calculate the cost of the lost ending inventory for theinsurance company. (Round the retail ratio to twodecimal places and the final answer to the nearestdollar.) Question content area bottom Part 1 The lostending inventory is $ enter your response here.

Ending inventory means the number of units left to be sold at the end of specified period.Ending…

Answered: A fire wiped out Parvati Paper…

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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In 2022, Sargent Company experienced a major casualty loss. The roof of its warehouse collapsed in an ice storm and destroyed its entire inventory. The company began the year with inventory of $300. It made purchases of $5,640 but returned $80 worth of merchandise. Sales prior to the ice storm were $9,400. Sargent must use the gross profit method to determine inventory on hand on the date of the casualty. The following is an excerpt of its income statement for the last three years. 2019 2020 2021 Net Sales $5,000 $6,000 $9,000 Cost of Goods Sold 2,150 2,340 3,312 General and Administrative Expense 500 600 900 Depreciation Expense 125 200 325 Operating Income $2,225 $2,860 $4,463 Requirement. Assume that Sargent uses the most recent three years of net sales and cost of goods sold to determine its historical gross profit. What are estimated cost of goods sold, estimated gross profit, and estimated ending…
On November 21, 2024, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $26,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1, 2024 $ 170,000 Net purchases from November 1, to the date of the fire 154,000 Net sales from November 1, to the date of the fire 234,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method.
Blossom Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns $168,500 Amount of the loss 412,700 30,100 Sales revenue Sales returns Rate of gross profit on net sales $628,200 25,600 20 % Merchandise with a selling price of $20,300 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,200 had a net realizable value of $5,200. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
A flood destroyed Toshiaki Company's warehouse and all of its inventory. Toshiaki will use the gross profit method to determine its inventory in the warehouse at the time. Toshiaki's management believes that the average of the last two years' gross profit percentage is a good estimate of the gross profit in the current year. Sales last year were $7,700 and $6,100 in the year before. Its cost of goods sold was $4,466 last year and $3,782 the year before. Toshiaki's prior-year balance sheet reported inventory of $450. Before the flood, net sales were $5,200. Toshiaki purchased $3,900 of inventory. Read the requirements. Requirement a. Use the gross profit method to determine Toshiaki's historical gross profit percentage. Identify the appropriate formula and then calculate Toshiaki's historical gross profit percentage for each year. (Round the gross profit percentage to one decimal place, X.X%.) Gross profit % Two Year's Prior % Prior Year % Requirements Round percentages to one decimal…
A fire wiped out Plymouth Paper Company's Inventory. The insurance company will accept an estimate using the retail method Last year's balance sheet stated that the ending inventory was $13,000 and it would usually sell for $38,000 Mr Pichai knows that the cost of purchases was $160,000 and the retail selling prices for the paper totalled $297,000. Credit card receipts indicate that there was $238,000 of sales since the beginning of the year Calculate the cost of the lost ending inventory for the insurance company. (Round the retail ratio to two decimal places and the final answer to the nearest dollar.) The lost ending inventory is $
Steritech Co., a furniture wholesaler, sells merchandise to Butler Co. on account, $86,000, terms n/30. The cost of the merchandise sold is $51,600. Steritech Co. issues a credit memorandum for $5,000 for merchandise that was damaged in shipment. Butler Co. agreed to keep the damaged merchandise. Illustrate the effects on the accounts and financial statements of Butler Co. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. a. The purchase. Financial Statement Effects DE PA Assets + Statement of Cash Flows Balance Sheet Liabilities + Stockholders' Equity Income Statement
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On January 1, a store had inventory of $48,000. January purchases were $46,000 and January sales were $95,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 20% of sales. Merchandise with a selling price of $5,000 remained undamaged after the fire. Compute the amount of the fire loss, assuming the store had no insurance coverage. Label all figures.

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