gross margin require Que.A substantial portion of inventory owned by Prentiss SportingGoods was recently destroyed when the roof collapsed during arainstorm. Prentiss also must have some of its accounting records.Prentiss must estimate the loss from the storm for insurancereporting and financial statement purposes. Prentiss uses theperiod's inventory system. The following accounting informationwas recovered from the damaged records:Beginning inventoryPurchase of date of stormSales to date of storm$ 2,00,400$4,01,900$ 6,01,100The value of undamaged inventory counted was $110,142.Historically Prentiss' gross margin percentage has beenapproximately 22% of sales.Required:Estimate the gross margin in dollars.

Step 1: Given DataBeginning Inventory: $200,400Purchases to date of storm: $401,900Sales to date of…

Answered: Que. A substantial portion of inventory…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 7E

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Doralin Sdn Bhd has been in business for several years but did not keep a complete set of books. Mrs Shuhadah, the owner has approached you to assist her in preparing the financial statements for the year ended 31 December 2019. The following is the trial balance extracted from the books of Doralin Sdn Bhd: Doralin Sdn Bhd Trial Balance as at 31s December 2019 Credit (S) 800 Account Debit (S) 660 2,500 4,400 Return Inward and Outward Carriage outward Drawings 1,700 Allowance for doubtful debts Bad debts Insurance 2,300 2,200 1,500 2,400 1,000 Carriage inward Commission received Discount allowed Discount received Motor expenses Household expenses Salaries Utilities 1,200 1,160 1,600 11,000 3,180 1,200 23,000 Interest on loan Accounts receivable Accounts payable Bank Loan from CIMB Inventory (Ist January 2019) Purchases Sales 22,500 28,000 30,000 8,250 59,000 124,260 Machinery Motor Vehicles Accumulated depreciation: Machinery Motor Vehicles Capital Total 65,000 48,000 19,200 9,600…
A truck costing $114000 was destroyed when its engine caught fire. At the date of the fire, the accumulated depreciation on the truck was $55000. An insurance check for $129000 was received based on the replacement cost of the truck. The entry to record the insurance proceeds and the disposition of the truck will include a O credit to the Truck account of $59000. ○ credit to the Accumulated Depreciation account for $55000. ○ Gain on Disposal of $70000. ○ Gain on Disposal of $15000. eTextbook and Media
a) Journalize the unrecorded transactions listed above using a perpetual inventory system (OMIT Explanations). b)Prepare an adjusted trial balance as at December 31, 2019. c)From the adjusted Trial Balance, prepare an Income Statement and a Retained Earnings Statement for the year ended December 31, 2019.
A truck costing $114000 was destroyed when its engine caught fire. At the date of the fire, the accumulated depreciation on the truck was $55000. An insurance check for $129000 was received based on the replacement cost of the truck. The entry to record the insurance proceeds and the disposition of the truck will include a credit to the Accumulated Depreciation account for $55000. credit to the Truck account of $59000. Gain on Disposal of $15000. Gain on Disposal of $70000.
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On 7 November 2021 there was a fire in the warehouse, in which inventory valued at $12,000 was destroyed. Under the terms of the insurance contract, the insurance company has stated that it will only pay out the first $3,000 of the claim. No entries have yet been made to record this. Make adjusting entries
Solve and provide explanation.
A sole trader operates his business from a warehouse which has been damaged by fire which occurred at the end of financial year. After the fire the remaining inventory that is undamaged amounts to GHS 2000 (cost). the account established the following information; Inventoey at the beinning of the year was GHS16,000. purchases during the year were GHS115,000 sales during he year was GHS140000. the trader sells his good at a mark up of 25% of cost. How much was the gross profit?
Ginger Ltd is completing its financial statements for the year ended 30 June 2020. In undertaking the accounting work, it becomes apparent that a vehicle that was thought to be on hand at the end of the previous financial year had actually been destroyed in a storm on 21 May 2019. The vehicle had a cost of $64,000 and accumulated depreciation of $16,000. Required: Provide the accounting entries to account for the discover of this prior period error in accordance with IAS 8 / AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. Ignore the tax effect and assume that the value of the vehicle is material to Ginger Ltd. (narrations are not required). ANSWER HERE: Date Account Name Debit Credit
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…
On April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Net Sales (January 1–March 31, 2022), $180,000; Purchases (January 1–March 31, 2022), $94,000.The company’s fiscal year ends on December 31. It uses a periodic inventory system.From an analysis of the April bank statement, you discover cancelled checks of $4,200 for cash purchases during the period April 1–10. Deposits during the same period totaled $18,500. Of that amount, 60% were collections on accounts receivable, and the balance was cash sales.Correspondence with the company’s principal suppliers revealed $12,400 of purchases on account from April 1 to April 10. Of that amount, $1,600 was for merchandise in transit on April 10 that was shipped FOB destination.Correspondence with the company’s principal customers produced acknowledgments of credit…

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