25-27 Numbers 25-27(Inventory Estimation – Gross Profit Method)Bad Company began operations 3 years ago and reported the following Sales and Gross profit:20202,500,00020213,600,00020224,000,000SalesGross profit on salesGross profit ratio750,000900,0001,400,00030%25%35%On August 31, 2023, a fire broke out in the warehouse destroying all inventories. The entityprovided the following information:P 200,000InventoryAccounts receivable, January 1, 2023Accounts receivable, August 31, 2023Accounts payable, January 1, 2023Accounts payable, August 31, 2023Collection on accounts receivable, January 1 to August 31, 2023Sales returns250,000400,00075,000165,0001,785,00050,000100,000Sales discountAccounts receivable written off15,000Payments to suppliers, January 1 to August 31, 2023Freight inFreight outPurchase returns1,450,00050,000200,00040,000Purchase discount20,000Goods out on consignment at August 31, at cost125,00025. What is the amount of gross purchases?a. 1,450,000b. 1,590,000c.1,650,000d. 1,600,00026. What is the amount of gross sales?a. 2,000,000b. 2,100,0002,050,000d. 2,065,000c.27. What is the estimated inventory loss suffered as a result of the fire?390,000b. 302,500c. 230,000d. 265,000a.

Here calculation of gross purchases, gross sales and balance ending inventory which are destroyed by…

Numbers 25-27 (Inventory Estimation – Gross Profit Method) Bad Company began operations 3 years ago and reported the following Sales and Gross profit: 2021 2020 2,500,000 3,600,000 2022 4,000,000 Sales Gross profit on sales Gross profit ratio 750,000 30% 900,000 1,400,000 35% 25% On August 31, 2023, a fire broke out in the warehouse destroying all inventories. The entity provided the following information:

Numbers 25-27 (Inventory Estimation – Gross Profit Method) Bad Company began operations 3 years ago and reported the following Sales and Gross profit: 2021 2020 2,500,000 3,600,000 2022 4,000,000 Sales Gross profit on sales Gross profit ratio 750,000 30% 900,000 1,400,000 35% 25% On August 31, 2023, a fire broke out in the warehouse destroying all inventories. The entity provided the following information:

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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