Problem 13-6 (AICPA Adapted)On December 31, 2020, a big fire caused severe damage to theWhat amount should be reported as inventory fire loss?At the beginning of 2020, the entity changed the policy on thesalvaged. Damaged merchandise marked to sell at P100,000profit rate of 5% higher than the gross profit rate in 2019.had an estimated realizable value of P10,000.warehouse of Claire Company.Undamaged merchandise marked to sell at P500,000 wasselling prices of the merchandise in order to produce a gross20202019Beginning inventoryPurchasesPurchase returnSales1,000,0008,000,000500,0009,000,0005,600,000100,0006,000,000onse St rate of 5% higher than the gross profit rate in 2019.Uadamaged merchandise marked to sell at P500,000 wassalve estimated realizable value of P10,000.a. 2,200,000b. 1,840,000c. 1,600,000d. 1,780,000

Merchandisers (wholesalers, retailers and distributors) buy inventory with the intention of selling…

Problem 13-6 (AICPA Adapted) On December 31, 2020, a big fire caused severe damage to the warehouse of Claire Company. 2020 Beginning inventory Purchases Purchase return Sales 2019 1,000,000 8,000,000 500,000 9,000,000 5,600,000 100,000 6,000,000 At the beginning of 2020, the entity changed the policy on the selling prices of the merchandise in order to produce a gross profit rate of 5% higher than the gross profit rate in 2019. Undamaged merchandise marked to sell at P500,000 was salvaged. Damaged merchandise marked to sell at P100,000 had an estimated realizable value of P10,000. What amount should be reported as inventory fire loss? a. 2,200,000 b. 1,840,000 c. 1,600,000 d. 1,780,000

Problem 13-6 (AICPA Adapted) On December 31, 2020, a big fire caused severe damage to the warehouse of Claire Company. 2020 Beginning inventory Purchases Purchase return Sales 2019 1,000,000 8,000,000 500,000 9,000,000 5,600,000 100,000 6,000,000 At the beginning of 2020, the entity changed the policy on the selling prices of the merchandise in order to produce a gross profit rate of 5% higher than the gross profit rate in 2019. Undamaged merchandise marked to sell at P500,000 was salvaged. Damaged merchandise marked to sell at P100,000 had an estimated realizable value of P10,000. What amount should be reported as inventory fire loss? a. 2,200,000 b. 1,840,000 c. 1,600,000 d. 1,780,000

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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