n April 15, 2021, fire damaged the office and warehouse of Wildhorse Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared. WILDHORSE CORPORATION MARCH 31, 2021 Cash $ 21,640 Accounts receivable 41,310 Inventory, December 31, 2020 77,490 Land 34,680 Buildings 112,620 Accumulated depreciation $ 44,180 Equipment 3,860 Accounts payable 22,809 Other accrued expenses 15,076 Common stock 103,100 Retained earnings 50,970 Sales revenue 134,520 Purchases 50,970 Miscellaneous expense 28,085 $ 370,655 $ 370,655 The following data and information have been gathered. 1. The fiscal year of the corporation ends on December 31. 2. An examination of the April bank statement and canceled checks revealed that checks written during the period April 1-15 totaled $ 12,890: $ 5,595 paid to accounts payable as of March 31, $ 3,438 for April merchandise shipments, and $ 4,219 paid for other expenses. Deposits during the same period amounted to $ 13,859, which consisted of receipts on account from customers with the exception of a $ 910 refund from a vendor for merchandise returned in April. 3. Correspondence with suppliers revealed unrecorded obligations at April 15 of $ 17,083 for April merchandise shipments, including $ 2,305 for shipments in transit (f.o.b. destination) on that date. 4. Customers acknowledged indebtedness of $ 47,140 at April 15, 2021. It was also estimated that customers owed another $ 8,080 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $ 633 will probably be uncollectible. 5. The companies insuring the inventory agreed that the corporation's fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation's audited financial statements disclosed this information: Year Ended December 31 2020 2019 Net sales $ 487,600 $ 420,210 Net purchases 258,650 224,280 Beginning inventory 53,000 72,510 Ending inventory 77,490 53,000 6. Inventory with a cost of $ 7,640 was salvaged and sold for $ 3,520. The balance of the inventory was a total loss. Compute the amount of inventory fire loss. (Round ratios for computational purposes to 2 decimal places, e.g 78.52% and final answer to 0 decimal places, e.g. 28,987.) Inventory fire loss $

n April 15, 2021, fire damaged the office and warehouse of Wildhorse Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared. WILDHORSE CORPORATION MARCH 31, 2021 Cash $ 21,640 Accounts receivable 41,310 Inventory, December 31, 2020 77,490 Land 34,680 Buildings 112,620 Accumulated depreciation $ 44,180 Equipment 3,860 Accounts payable 22,809 Other accrued expenses 15,076 Common stock 103,100 Retained earnings 50,970 Sales revenue 134,520 Purchases 50,970 Miscellaneous expense 28,085 $ 370,655 $ 370,655 The following data and information have been gathered. 1. The fiscal year of the corporation ends on December 31. 2. An examination of the April bank statement and canceled checks revealed that checks written during the period April 1-15 totaled $ 12,890: $ 5,595 paid to accounts payable as of March 31, $ 3,438 for April merchandise shipments, and $ 4,219 paid for other expenses. Deposits during the same period amounted to $ 13,859, which consisted of receipts on account from customers with the exception of a $ 910 refund from a vendor for merchandise returned in April. 3. Correspondence with suppliers revealed unrecorded obligations at April 15 of $ 17,083 for April merchandise shipments, including $ 2,305 for shipments in transit (f.o.b. destination) on that date. 4. Customers acknowledged indebtedness of $ 47,140 at April 15, 2021. It was also estimated that customers owed another $ 8,080 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $ 633 will probably be uncollectible. 5. The companies insuring the inventory agreed that the corporation's fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation's audited financial statements disclosed this information: Year Ended December 31 2020 2019 Net sales $ 487,600 $ 420,210 Net purchases 258,650 224,280 Beginning inventory 53,000 72,510 Ending inventory 77,490 53,000 6. Inventory with a cost of $ 7,640 was salvaged and sold for $ 3,520. The balance of the inventory was a total loss. Compute the amount of inventory fire loss. (Round ratios for computational purposes to 2 decimal places, e.g 78.52% and final answer to 0 decimal places, e.g. 28,987.) Inventory fire loss $

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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On April 15, 2021, fire damaged the office and warehouse of Wildhorse Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared.

WILDHORSE CORPORATION MARCH 31, 2021
Cash	$ 21,640
Accounts receivable	41,310
Inventory, December 31, 2020	77,490
Land	34,680
Buildings	112,620
Accumulated depreciation		$ 44,180
Equipment	3,860
Accounts payable		22,809
Other accrued expenses		15,076
Common stock		103,100
Retained earnings		50,970
Sales revenue		134,520
Purchases	50,970
Miscellaneous expense	28,085
	$ 370,655	$ 370,655

The following data and information have been gathered.

The fiscal year of the corporation ends on December 31.

An examination of the April bank statement and canceled checks revealed that checks written during the period April 1-15 totaled $ 12,890: $ 5,595 paid to accounts payable as of March 31, $ 3,438 for April merchandise shipments, and $ 4,219 paid for other expenses. Deposits during the same period amounted to $ 13,859, which consisted of receipts on account from customers with the exception of a $ 910 refund from a vendor for merchandise returned in April.

Correspondence with suppliers revealed unrecorded obligations at April 15 of $ 17,083 for April merchandise shipments, including $ 2,305 for shipments in transit (f.o.b. destination) on that date.

Customers acknowledged indebtedness of $ 47,140 at April 15, 2021. It was also estimated that customers owed another $ 8,080 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $ 633 will probably be uncollectible.

The companies insuring the inventory agreed that the corporation's fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation's audited financial statements disclosed this information:

	Year Ended December 31
	2020	2019
Net sales	$ 487,600	$ 420,210
Net purchases	258,650	224,280
Beginning inventory	53,000	72,510
Ending inventory	77,490	53,000

Inventory with a cost of $ 7,640 was salvaged and sold for $ 3,520. The balance of the inventory was a total loss.

Compute the amount of inventory fire loss. (Round ratios for computational purposes to 2 decimal places, e.g 78.52% and final answer to 0 decimal places, e.g. 28,987.)

Inventory fire loss

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