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E6.18 modified The inventory of Ipswich Books was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first two months of the year are obtained: Sales revenue $51,000, Sales returns and allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase returns and allowances $1,800. Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 40% on net sales. b. A beginning inventory of $30,000 and gross profit rate of 25% on cost

E6.18 modified The inventory of Ipswich Books was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first two months of the year are obtained: Sales revenue $51,000, Sales returns and allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase returns and allowances $1,800. Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 40% on net sales. b. A beginning inventory of $30,000 and gross profit rate of 25% on cost

FINANCIAL ACCOUNTING
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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E6.18 modified The inventory of Ipswich Books was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first two months of the year are obtained: Sales revenue $51,000, Sales returns and allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase returns and allowances $1,800. Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 40% on net sales. b. A beginning inventory of $30,000 and gross profit rate of 25% on cost
Transcribed Image Text:E6.18 modified The inventory of Ipswich Books was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first two months of the year are obtained: Sales revenue $51,000, Sales returns and allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase returns and allowances $1,800. Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 40% on net sales. b. A beginning inventory of $30,000 and gross profit rate of 25% on cost
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