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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.
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