PROBLEM 40: OOO Company uses the retail inventory method. At the end of the current year,
PROBLEM 40: OOO Company uses the retail inventory method. At the end of the current year, OOO Company suffered a fire loss that destroyed most of its inventory. After the fire, only goods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000 was salvaged. The following information is available prior to the fire:
Cost Retail
Beginning inventory P 1,100,000 P 2,200,000
Purchases 15,800,000 26,300,000
Freight in 540,000
Purchase returns 600,000 1,000,000
Purchase allowances 300,000
Departmental transfer in 400,000 800,000
Markups 300,000
Cancelation of markdown 100,000
Departmental transfer out 350,000 900,000
Markdowns 800,000
Cancelation of markup 50,000
Sales 24,700,000
Sales returns 350,000
Sales discounts 200,000
Sales allowances 100,000
Employee discounts 600,000
Normal wastage 5% of sales
33. What is the estimated fire loss if OOO Company applies the conservative retail approach?
34. What is the estimated cost of goods sold if OOO Company applies the FIFO retail approach?
35. What is the estimated ending inventory if OOO Company applies the average cost approach
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