Merkley Manufacturing began operations five years ago. On August 13, 2017, a fire broke out in the warehouse destroying all inventory and many accounting records relating to the inventory. The information available is presented below. All sales and purchases are on account. January 1, 2017 August 13, 2017 Inventory ................................................ $ 128,590 Accounts receivable ............................. 130,590 $107,320 Accounts payable ................................. 88,140 122,850 Collection on accounts receivable, January 1 - August 13 .......................... 753,800 Payments to suppliers, January 1- August 13 ......................................... 487,500 Goods out on consignment at August 13, at cost ............................ 32,500 Summary of previous years sales: 2014 2015 2016 Sales ...................................................... $626,000 $675,000 $680,000 Gross profit on sales ............................ 194,060 189,000 231,200 Instructions: Determine the inventory loss suffered as a result of the fire
Merkley Manufacturing began operations five years ago. On August 13, 2017, a fire broke out in the
warehouse destroying all inventory and many accounting records relating to the inventory. The
information available is presented below. All sales and purchases are on account.
January 1, 2017 August 13, 2017
Inventory ................................................ $ 128,590
Accounts payable ................................. 88,140 122,850
Collection on accounts receivable,
January 1 - August 13 .......................... 753,800
Payments to suppliers, January 1-
August 13 ......................................... 487,500
Goods out on consignment at
August 13, at cost ............................ 32,500
Summary of previous years sales:
2014 2015 2016
Sales ...................................................... $626,000 $675,000 $680,000
Gross profit on sales ............................ 194,060 189,000 231,200
Instructions: Determine the inventory loss suffered as a result of the fire.
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