Gross profit method2. Northstar Sales Corp. was organized on January 1, 2001. OnDecember 31, 2002, the company lost most of its inventory in awarehouse fire just before the year-end count of inventory wasto take place. Data from the records disclosed the following:2002PO P173,120692,00064,6002001Inventory, January 1Purchases during yearPurchase returns and allowances duringyearSales during yearSales returns and allowances during year860,00046,120788,00016,000836,00020,000On January 1, 2002, Northstar's pricing policy was changed so thatthe gross profit rate would be 3 percentage points higher than theone earned in 2001.Salvaged undamaged merchandise was marked to sell at P24,000,while damaged merchandise marked to sell at P16,000 had anestimated net realizable value of P3,600.Requirement: Determine the company's inventory loss due to thefire that occurred on December 31, 2002.(Adapted)

Name: Gross profit method2. Northstar Sales Corp. was organized on January
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Description: Gross profit method2. Northstar Sales Corp. was organized on January 1, 2001. OnDecember 31, 2002, the company lost most of its inventory in awarehouse fire just before the year-end count of inventory wasto take place. Data from the records disclose

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Gross profit method 2. Northstar Sales Corp. was organized on January 1, 2001. On December 31, 2002, the company lost most of its inventory ina warehouse fire just before the year-end count of inventory was to take place. Data from the records disclosed the following: 2001 2002 PO P173,120 Inventory, January 1 Purchases during year Purchase returns and allowances during 860,000 692,000 46,120 64,600 year Sales during year Sales returns and allowances during year 788,000 16,000 836,000 20,000 On January 1, 2002, Northstar's pricing policy was changed so that the gross profit rate would be 3 percentage points higher than the one earmed in 2001. Salvaged undamaged merchandise was marked to sell at P24,000, while damaged merchandise marked to sell at P16,000 had an estimated net realizable value of P3,600. Requirement: Determine the company's inventory loss due to the fire that occurred on December 31, 2002. (Adapted)

Gross profit method 2. Northstar Sales Corp. was organized on January 1, 2001. On December 31, 2002, the company lost most of its inventory ina warehouse fire just before the year-end count of inventory was to take place. Data from the records disclosed the following: 2001 2002 PO P173,120 Inventory, January 1 Purchases during year Purchase returns and allowances during 860,000 692,000 46,120 64,600 year Sales during year Sales returns and allowances during year 788,000 16,000 836,000 20,000 On January 1, 2002, Northstar's pricing policy was changed so that the gross profit rate would be 3 percentage points higher than the one earmed in 2001. Salvaged undamaged merchandise was marked to sell at P24,000, while damaged merchandise marked to sell at P16,000 had an estimated net realizable value of P3,600. Requirement: Determine the company's inventory loss due to the fire that occurred on December 31, 2002. (Adapted)

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Assume that the following was extracted from Massy’s accounting information system foroperations at this outlet for the week, up to the time of the fire.Sales 830,000 Purchases 580,000 Sales Returns 42,000 Purchases Returns 56,000 Beginning Inventory 160,000 The company’s gross profit percent based on net selling price is 40%. Merchandise with aselling price of $60,000 remained undamaged after the fire. Some smoke damaged merchandisehad a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profitmethod, for insurance purposes. Required:Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.
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