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Headland Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) Purchases Purchase returns $81,100 285,300 27,500 Sales revenue Sales returns Gross profit % based on net selling price $408,700 20,700 33 % Merchandise with a selling price of $29,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,300. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)

Headland Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) Purchases Purchase returns $81,100 285,300 27,500 Sales revenue Sales returns Gross profit % based on net selling price $408,700 20,700 33 % Merchandise with a selling price of $29,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,300. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)

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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Headland Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) Purchases Purchase returns $81,100 285,300 Inventory fire loss $ 27,500 Sales revenue Sales returns Gross profit % based on net selling price $408,700 20,700 33 % Merchandise with a selling price of $29,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,300. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
Transcribed Image Text:Headland Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) Purchases Purchase returns $81,100 285,300 Inventory fire loss $ 27,500 Sales revenue Sales returns Gross profit % based on net selling price $408,700 20,700 33 % Merchandise with a selling price of $29,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,300. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
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