Nordman Lumber Company handles two principal lines of mechandise with the associated gross profit shown below: Lumber 52% Millwork 53% On August 25, a fire destroyed the office and a considerable portion of the lumber and millwork inventory stacked in the yard. To file a loss for insurance purposes, the company must know what the inventories were immediately preceeding the fire. No detail or perpetual inventory records were available after the fire except the following general ledger information which was kept in a fireproof vault. Lumber Millwork Inventory, January 1 $455,000 $360,000 Purchases up to August 25 $1,530,000 $920,000 Sales up to August 25 $2,595,000 $995,000 Using the gross profit method for estimating inventory, determine the amount of inventory for both lumber and millwork that was on hand just before the fire.

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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Question

Nordman Lumber Company handles two principal lines of mechandise
with the associated gross profit shown below:

Lumber	52%
Millwork	53%

On August 25, a fire destroyed the office and a considerable portion of
the lumber and millwork inventory stacked in the yard. To file a loss for
insurance purposes, the company must know what the inventories were
immediately preceeding the fire. No detail or perpetual inventory records
were available after the fire except the following general ledger information
which was kept in a fireproof vault.

		Lumber	Millwork
Inventory, January 1		$455,000	$360,000
Purchases up to August 25		$1,530,000	$920,000
Sales up to August 25		$2,595,000	$995,000

Using the gross profit method for estimating inventory, determine the
amount of inventory for both lumber and millwork that was on hand
just before the fire.


Note: Enter all amounts as positive amounts
		Lumber	Millwork
		0
		0
		0
		0
		0
		0
		0

	0

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