A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also must have some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the period's inventory system. The following accounting information was recovered from the damaged records: Beginning inventory $200,400 Purchase of date of storm $401,900 Sales to date of storm $601,100 The value of undamaged inventory counted was $110,142. Historically Prentiss' gross margin percentage has been approximately 22% of sales. Required: Estimate the gross margin in dollars.
A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also must have some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the period's inventory system. The following accounting information was recovered from the damaged records: Beginning inventory $200,400 Purchase of date of storm $401,900 Sales to date of storm $601,100 The value of undamaged inventory counted was $110,142. Historically Prentiss' gross margin percentage has been approximately 22% of sales. Required: Estimate the gross margin in dollars.
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1CP
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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
must have some of its accounting records. Prentiss must estimate the loss from
the storm for insurance reporting and financial statement purposes. Prentiss
uses the period's inventory system. The following accounting information was
recovered from the damaged records:
Beginning inventory
$200,400
Purchase of date of storm $401,900
Sales to date of storm $601,100
The value of undamaged inventory counted was $110,142. Historically Prentiss'
gross margin percentage has been approximately 22% of sales.
Required:
Estimate the gross margin in dollars.
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