A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during arainstorm. Prentiss also lost some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting andfinancial statement purposes. Prentiss uses the periodic inventory system. The following accounting information was recovered fromthe damaged records.Beginning inventoryPurchases to date of storm$196,000398,000600,800Sales to date of stormThe value of undamaged inventory counted was $102,676. Historically, Prentiss' gross margin percentage has been approximately 22percent of sales.RequiredEstimate the following:a. Gross margin in dollars.b. Cost of goods sold in dollars.c. Ending inventory.d. Amount of lost inventory.a. Gross marginb. Cost of goods soldc. Estimated ending inventoryd. Inventory lost

Inventory means the stock of goods in which the businessmen deals. Cost of goods sold means the…

Answered: A substantial portion of inventory…

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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A substantlal portlon of Inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a ralnstorm. 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 perlodic Inventory system. The following accounting information was recovered from the damaged records. Beginning inventory $196, eee 398, e00 Purchases to date of storm Sales to date of storm бее, вее The value of undamaged Inventory counted was $102,676. Hıstorically, Prentiss' gross margin percentage has been approximately 22 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 b. Cost of goods sold C. Estimated ending inventory d. Inventory lost
On November 21, 2021, 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 $22,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $150,000 150,000 230,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. ✓ Answer is complete but not entirely correct. Estimated loss from fire $ 153,200 ×
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…
ABC Corporation lost most of its inventory in a fire on April 10, 2020. Its books disclose following data: Inventory, January 1, 2020 Purchases in 2020 Purchases returns Sales Sales returns Purchases discounts Rate of gross profit on sales S180,000 400,000 30,000 650,000 25,000 10,000 30% Through the diligence of the local Fire Department, ABC was able to salvage and merchandise costing $4,000. Required: Calculate the amount of the loss from the fire, to be presented as a claim to th company. Show your computations.
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Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
A sale trader operates his business from a warehouse ,which has been damage by a fire ,which occurred at the end of the financial year. After the fire ,the remaining inventory that is undamaged amount to Gh 2,000(Cost). The accountant establishes the following information : (a). Inventory at the beginning of the year was Gh 16,000 (b). Purchases during the year were Gh115,000 (c). Sales during the year were GH 140,000 (d).The trader sells his goods at a mark-up of 25% of cost . How much was the gross profit ?
As a result of a thorough physical inventory, Ulalam Company determined that it had inventory worth $180,000 at December 31, 2020. This count did not take into consideration the following facts: Miya Consignment store currently has goods worth P35,000 on its sales floor that belong to Ulalam but are being sold on consignment by Miya. The selling price of these goods is $50,000. Ulalam purchased $13,000 of goods that were shipped on December 27, FOB destination, that will be received by Ulalam on January 3. How much is the correct amount of inventory to be reported in Ulalam Company’s statement of financial position?
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.

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