Late on the night of September 30, 2011, an arsonist destroyed thePumpkin Company warehouse, which was full of inventory. Luckily theaccounting records were stored in another facility and not destroyed inthe fire. Pumpkin Company is in the process of filing a claim with itsinsurance company for the inventory loss due to the fire.Beginning inventoryPurchases through September 30, 2011$2,25,500$ 6,23,250Net sales revenue through Sept. 30, 2011$ 8,25,500The gross margin percent has historically been 30% of net salesrevenue.Required:Estimate the value of the inventory destroyed in the fire using the grossmargin method.

Step 1: Key Information RecapBeginning Inventory: $225,500Purchases through September 30, 2011:…

Answered: Late on the night of September 30,…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1CP

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On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: Sales, January 1 through April 15 $573000 Inventory, January 1 91000 Purchases, January 1 through April 15 477500 20% Markup on cost The amount of the inventory loss is estimated to be • $91000. O $109200. O $95500. O $45500.
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QUESTION: ON NOVEMBER 21, 2016, A FIRE AT HODGE COMPANY'S WAREHOUSE CAUSED SEVERE DAMAGE TO ITS ENTIRE INVENTORY OF PRODUCT TEX. HODGE ESTIMATES THAT ALL USABLE DAMAGED GOODS CAN BE SOLD FOR $17,000. THE FOLLOWING INFORMATION WAS AVAILABLE FROM THE RECORDS OF HODGE'S PERIODIC INVENTORY SYSTEM: INVENTORY, NOVEMBER 1 $ 125,000 NET PURCHASES FROM NOVEMBER 1, TO THE DATE OF THE FIRE 145,000 NET SALES FROM NOVEMBER 1, TO THE DATE OF THE FIRE 225,000 BASED ON RECENT HISTORY, HODGE'S GROSS PROFIT RATIO ON PRODUCT TEX IS 40% OF NET SALES. REQUIRED: CALCULATE THE ESTIMATED LOSS ON THE INVENTORY FROM THE FIRE, USING THE GROSS PROFIT METHOD.
Calculate the estimated loss
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $22,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $150,000 150,000 230,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. ✓ Answer is complete but not entirely correct. Estimated loss from fire $ 153,200 ×
On September 22, 2018, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company's periodic inventory system: Inventory, Jamuary 1, 2018 Net purchases, January 1 through September 22 Net sales, January 1 through Septenber 22 Gross profit ratio $144, 000 374, 000 570, 000 30% Required: Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method. Beginning inventory Plus: Net purchases Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyed
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2016 Purchases to date $1,900,000 5,800,000 Freight-in Sales to date 400,000 8,200,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit cost of the inventory destroyed in the fire. hod to estimate
Muller Computers stores its inventory in a warehouse that burned to the ground in late November, 2018. Their sales office was at a different location. In order to file a claim with their insurance, the owners ask you to estimate the inventory that was in the warehouse. The following information is available: Beginning inventory Purchases through November 30 Net sales revenue through November 30 $375,500 470,250 793,000 The company's gross profit has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method. a. $388,450 b. $410,000 c. $369,950 d. $528,550
Required: Compute for the cost of inventory lost in the fire.
On November 21, 2024, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $26,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1, 2024 $ 170,000 Net purchases from November 1, to the date of the fire 154,000 Net sales from November 1, to the date of the fire 234,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method.
On December 31, 2020, a fire broke out in the warehouse of Problem 13-12 (IAA) Regatta Company destroying all inventory. The following de are available for the current year: January 1 December 31 500,000 480,000 400,000 Inventory Accounts receivable Accounts payable Collection on accounts receivable Payments to suppliers Goods out on consignment at sales price Salvage value of inventory 440,000 500,000 2,640,000 1,600,000 200,000 20,000 2019 2018 2017 2,800,000 1,260,000 2,700,000 1,080,000 2,500,000 860,000 Sales Gross profit 1. What is the amount of purchases for the current year? a. 1,700,000 b. 1,600,000 c. 1,500,000 d. 2,100,000 2. What is the amount of sales for the current year? a. 2,600,000 b. 2,680,000 c. 2,640,000 d. 2,200,000 3. What is the inventory fire loss on December 31, 2020? a. 600,000 b. 420,000 c. 508,000 d. 500,000 374
PROBLEM 19: San Juan Manufacturing began operations 5 years ago. On August 13, 2021, a fire broke out in the warehouse destroying all inventory and many records relating to the inventory. The information available is presented below (all sales and purchases are on account): 1/1/2021 P 143,850 130,590 88,140 8/13/2021 Inventory Accounts receivable Accounts payable Collections on accounts P 128,890 122,850 receivable, 1/1 to 8/13 753,800 Payments to suppliers, 1/1 to 8/13 Goods out on consignment at 8/13 at cost 487,500 52,900 Summary on previous years' sales follows: 2019 P 626,000 P705,000 P 680,000 225,600 2018 2020 Sales Gross profit 187,800 231,200 24. What is the inventory loss suffered as a result of the fire if the average gross profit rate is used? 25. What is the inventory loss suffered as a result of the fire if the trend in gross profit rate continues?

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