On April 15, a bad day in many ways, a fire destroyed the entire inventory of a local retail store, except for patiallydamaged inventory ($10,000 cost) which was sold as scrap for $5,000 cash. The accounting records indicate thefollowing:Sales Income at selling prices, Jan. 1 to April 15, $360,000Inventory at cost, Jan. 1, $50,000Purchases at cost, Jan. 1 to April 15, $280,000Gross profit is 25% of costEstimate the dollar loss to be reported to insurance using the gross profit method.

The difference between the sales and the cost of goods sold is called gross profit. Gross profit…

Answered: On April 15, a bad day in many ways, a…

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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Problem 13-4 (AICPA Adapted) On September 30, a fire at Elusive Company's only warehouse caused severe damaged to the entire inventory. Based on recent history, the entity has a gross profit of 30% on cost of goods sold. A physicąl inventory disclosed usable damaged goods which can be sold to a jobber for P100,000. The following information is available from the records for the nine months ended September 30: Inventory - January 1 Purchases Net sales 1,100,000 6,000,000 7,280,000 What is the estimated amount of fire loss? a. 1,500,000 b. 1,400,000 C. 2,004,000 d. 1,964,000
Brad Essary owned a small company that sold garden equipment. The equipment was expensive, and a perpetual system was maintained for control purposes. Even so, lost, damaged, and stolen merchandise normally amounted to 5 percent of the inventory balance. On June 14, Essary's warehouse was destroyed by fire. Just prior to the fire, the accounting records contained a $154,500 balance in the Inventory account. However, inventory costing $11,100 had been sold and delivered to customers but had not been recorded in the books at the time of the fire. The fire did not affect the showroom, which contained inventory that cost $41,200. Required Estimate the amount of inventory destroyed by fire. Inventory destroyed by fire
The Sandy Bay is a trader in sand. On December 31, 2010 the closing inventory was completely destroyed by flood rains. The following information is available: (1) Inventory at December 1, 2010 at cost $31,400 (2) Purchases for December 2010 $55,600 (3) Sales for December 2010 $88,800 (4) Standard mark-up is 25% Based on this information, what was the value of the closing inventory? a. $15,960 b. $17,760 c. $20,400 d. $25,800 The Grey Flannel is a trader in French cologne. The firm operates with a standard mark up of 2 / 5. What would be the margin? a. 1 / 7 b. 1 / 3 c. 2 / 3 d. 2 / 7 A Non- Profit Entity has paid Rent of $40,000 for the month of June in its Receipts and Payment account. At the beginning of the month there was an amount of $5,000 owing, and by the end of the month the business had prepaid $3,000.…
Wildhorse Co. just took its physical inventory on December 31. The count of inventory items on hand at the company’s business locations resulted in a total inventory cost of $289,300. In reviewing the details of the count and related inventory transactions, you have discovered the following items that had not been considered. 1. Wildhorse has sent inventory costing $30,510 on consignment to Richfield Company. All of this inventory was at Richfield’s showrooms on December 31. 2. The company did not include in the count inventory (cost, $18,270) that was sold on December 28, terms FOB shipping point. The goods were in transit on December 31. 3. The company did not include in the count inventory (cost, $12,840) that was purchased with terms of FOB shipping point. The goods were in transit on December 31. Compute the correct December 31 inventory. Correct December 31 inventory $enter a dollar amount
7. The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records:
What is the Correct December 31 inventory amount ?? Bramble Company just took its physical inventory. The count of inventory items on hand at the company’s business locations resulted in a total inventory cost of $280,000. In reviewing the details of the count and related inventory transactions, you have discovered the following. 1. Bramble has sent inventory costing $26,000 on consignment to Alissa Company. All of this inventory was at Alissa’s showrooms on December 31. 2. The company did not include in the count inventory (cost, $20,000) that was sold on December 28, terms FOB shipping point. The goods were in transit on December 31. 3. The company did not include in the count inventory (cost, $12,000) that was purchased with terms of FOB shipping point. The goods were in transit on December 31. Compute the correct December 31 inventory.

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