Novak Company lost most of its inventory in a fire in December just before the year-end physical inventory corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns $178,300 355,000 27,700 Sales revenue Sales returns Rate of gross profit on net sales $607,900 21,600 30 %
Novak Company lost most of its inventory in a fire in December just before the year-end physical inventory corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns $178,300 355,000 27,700 Sales revenue Sales returns Rate of gross profit on net sales $607,900 21,600 30 %
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Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement
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![Novak Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The
corporation's books disclosed the following.
Beginning inventory
Purchases for the year
Purchase returns
$178,300
Amount of the loss
355,000
$
27,700
Sales revenue
Sales returns
Rate of gross profit on net sales
$607,900
21,600
Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of
$15,500 had a net realizable value of $5,300.
30 %
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5313124d-0d82-4d96-9fd1-4fc920dfa14c%2Fbbe4dd16-eb29-4775-a3b8-b8c6528b6589%2F58vanwd_processed.png&w=3840&q=75)
Transcribed Image Text:Novak Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The
corporation's books disclosed the following.
Beginning inventory
Purchases for the year
Purchase returns
$178,300
Amount of the loss
355,000
$
27,700
Sales revenue
Sales returns
Rate of gross profit on net sales
$607,900
21,600
Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of
$15,500 had a net realizable value of $5,300.
30 %
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
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