On June 30, 2021, a fire at Norjanna Company’s only warehouse caused severe damage to its inventory. Based on recent history, Norjanna has a gross profit of 25% on cost. The following information is available from the records for the six months ended June 30, 2021: Inventory – January 1 4,000,000 Net purchases 18,000,000 Net sales 20,000,000 A physical inventory disclosed undamaged goods with selling price of P1,000,000. On June 30, 2021, unsold goods on consignment with selling price of P1,500,000 are in the hands of the consignee. What is the estimated cost of inventory destroyed by fire?
On June 30, 2021, a fire at Norjanna Company’s only warehouse caused severe damage to its
inventory. Based on recent history, Norjanna has a gross profit of 25% on cost. The following
information is available from the records for the six months ended June 30, 2021:
Inventory – January 1 4,000,000
Net purchases 18,000,000
Net sales 20,000,000
A physical inventory disclosed undamaged goods with selling price of P1,000,000. On June 30, 2021,
unsold goods on consignment with selling price of P1,500,000 are in the hands of the consignee. What
is the estimated cost of inventory destroyed by fire?
Judy Company uses the retail inventory method to approximate its ending inventory. The following
information is available for the current year:
Cost Retail
Beginning inventory 650,000 1,200,000
Purchases 9,000,000 14,700,000
Freight in 200,000 -
Purchase returns 300,000 500,000
Purchase allowance 150,000
Departmental transfer in 200,000 300,000
Net markups 300,000
Net markdowns 1,000,000
Sales 11,500,000
Sales discounts 100,000
Employee discounts 500,000
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