On September 5, 20x4, a fire damaged the warehouse of Texas company. All inventory items and many accounting records stored in the warehouse was destroyed. However, a portion of the inventory could be sold for scrap. The company's backup files provide the following information: Inventory, January 1 P 750,000 Cash sales, January 1-September 5 445,000 Purchases, January 1-September 5 2,770,000 Collection of accounts receivable, January 1-September 5 4,230,000 Accounts Receivable, January 1 350,000 Accounts Receivable, September 5 530,000 Salvage value of Inventory 15,000 Gross profit ratio 32% What is the estimated inventory fire loss?
On September 5, 20x4, a fire damaged the warehouse of Texas company. All inventory items and many accounting records stored in the warehouse was destroyed. However, a portion of the inventory could be sold for scrap. The company's backup files provide the following information: Inventory, January 1 P 750,000 Cash sales, January 1-September 5 445,000 Purchases, January 1-September 5 2,770,000 Collection of accounts receivable, January 1-September 5 4,230,000 Accounts Receivable, January 1 350,000 Accounts Receivable, September 5 530,000 Salvage value of Inventory 15,000 Gross profit ratio 32% What is the estimated inventory fire loss?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On September 5, 20x4, a fire damaged the warehouse of Texas company. All inventory items and many accounting records stored in the warehouse was destroyed. However, a portion of the inventory could be sold for scrap. The company's backup files provide the following information:
| Inventory, January 1 | P 750,000 |
| Cash sales, January 1-September 5 | 445,000 |
| Purchases, January 1-September 5 | 2,770,000 |
| Collection of |
4,230,000 |
| Accounts Receivable, January 1 | 350,000 |
| Accounts Receivable, September 5 | 530,000 |
| Salvage value of Inventory | 15,000 |
| Gross profit ratio | 32% |
What is the estimated inventory fire loss?
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