A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also lost some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the periodic inventory system. The following accounting information was recovered from the damaged records. Beginning inventory Purchases to date of storm Sales to date of storm $203,400 398,400 599,700 The value of undamaged inyentory counted was $135,125. Historically, Prentiss' gross margin percentage has been approximately 25 percent of sales. Required Estimate the following: a. Gross margin in dollars. b. Cost of goods sold in dollars. c. Ending inventory. d. Amount of lost inventory. a. Gross margin Cost of goods sold Estimated ending inventory b. C.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a
rainstorm. Prentiss also lost some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and
financial statement purposes. Prentiss uses the periodic inventory system. The following accounting information was recovered from
the damaged records.
Beginning inventory
Purchases to date of storm
$203,400
398,400
599,700
Sales to date of storm
The value of undamaged inyentory counted was $135,125. Historically, Prentiss' gross margin percentage has been approximately 25
percent of sales.
Required
Estimate the following:
a. Gross margin in dollars.
b. Cost of goods sold in dollars.
c. Ending inventory.
d. Amount of lost inventory.
Gross margin
a
b.
Cost of goods sold
C.
Estimated ending inventory
d. Inventory lost
Transcribed Image Text:A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also lost some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the periodic inventory system. The following accounting information was recovered from the damaged records. Beginning inventory Purchases to date of storm $203,400 398,400 599,700 Sales to date of storm The value of undamaged inyentory counted was $135,125. Historically, Prentiss' gross margin percentage has been approximately 25 percent of sales. Required Estimate the following: a. Gross margin in dollars. b. Cost of goods sold in dollars. c. Ending inventory. d. Amount of lost inventory. Gross margin a b. Cost of goods sold C. Estimated ending inventory d. Inventory lost
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