Que. A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also must have some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the period's inventory system. The following accounting information was recovered from the damaged records: Beginning inventory Purchase of date of storm Sales to date of storm $ 2,00,400 $4,01,900 $ 6,01,100 The value of undamaged inventory counted was $110,142. Historically Prentiss' gross margin percentage has been approximately 22% of sales. Required: Estimate the gross margin in dollars.

Que. A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a rainstorm. Prentiss also must have some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the period's inventory system. The following accounting information was recovered from the damaged records: Beginning inventory Purchase of date of storm Sales to date of storm $ 2,00,400 $4,01,900 $ 6,01,100 The value of undamaged inventory counted was $110,142. Historically Prentiss' gross margin percentage has been approximately 22% of sales. Required: Estimate the gross margin in dollars.

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 18P: Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett...

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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 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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4) The Main Company requires an estimate of cost of goods lost in a fire on May 10, 2019. Merchandise on hand on January 1 was $42,000. Purchases since January were $63,000; freight in was $4,800; purchase returns and allowances was $6,000. Sales are made at 2 times cost and sales totaled $100,000 thru May 10, 2018. Goods costing $16,000 were left undamaged by the fire. Please compute the cost of the goods destroyed in the fire.
Flint Hardware lost most of its inventory in an electrical fire that destroyed the company's warehouse and retail store in 2024. Fortunately, the accounting records were backed up on the owner's computer in her home office and could, therefore, be recovered. However, Flint uses the periodic inventory system. Therefore, it could not determine the amount of inventory that was lost in the fire because the inventory was destroyed. Flint's insurance company requires Flint to prepare a reasonable estimate of the lost inventory before it can process the insurance claim. You are Flint's accountant. You review the accounting records for 2023 and 2024 (to the date of the fire) and obtain the following information: 1. 2. 3. 4. 5. Sales in 2023 were $945,000. Sales in 2024 up to the time of the fire amounted to $665,000. Cost of goods sold in 2023 was $585,900. 2024 inventory purchased to the date of the fire totalled $477,000. The ending inventory reported on the 2023 statement of financial…
You are the lead partner overseeing the audit for Camo Ltd, a privately owned company. The completion of the audit report is pending for the income year 2020 and you have noted several situations with possible actions. The situations are as follows: 1. Camo Corporation carries its property, plant, and equipment accounts at current market values. Current market values exceed historical cost by a highly material amount, and the effects are pervasive throughout the financial statements. 2. Management of Camo Corporation refuses to allow you to observe, or make, any counts of inventory. The recorded book value of inventory is highly material. 3. You were unable to confirm accounts receivable with Camo's customers. However, because of detailed sales and cash receipts records, you were able to perform reliable alternative audit procedures. 4. One week before the end of fieldwork, you discover that the audit manager on the Camo engagement owns a material amount of Camo's common stock. 5. You…
Statement 1: When change in the estimated life of depreciable asset occurs at the time of an intercompany sale, the treatment is different than if the change occurred while the asset remained on the books of the selling affiliate. Statement 2: The branch reports ending inventory of $1,500 consisting of goods from the home office billed at 125% above cost. The related "allowance" account in the home office books must have a credit balance of $300. Statement 3: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in a profit or loss. Statement 4: Intercompany sales of inventory necessitate adjustments to the calculation of the distribution of income to the controlling interests. Which statement/s is/are true?
Assume that on September 30, immediately after this balance sheet was prepared, a tornado completely destroyed one of the barns. This barn had a cost of $14,000 and was not insured against this type of disaster. Explain what changes would be required in your September 30 balance sheet to reflect the loss of this barn.
A machine costing $152,900 was destroyed when it caught fire. At the date of the fire, the accumulated depreciation on the machine was $76,000. An insurance check for $238,400 was received based on the replacement cost of the machine. The entry to record the insurance proceeds and the disposition of the machine will include a: a) credit to the Accumulated Depreciation account for $84,000. b) credit to the Equipment account for $119,800. c) gain on disposal of $32,200. d) gain on disposal of $161,500.
On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $238,400 and has accumulated depreciation of $214,560. Depreciation has been recorded up to the end of the year. Which of the following will be included in the journal entry for the disposal? a. Loss on Disposal of Asset, debit, $214,560 b. Accumulated Depreciation, debit, $238,400 c. Gain on Disposal of Asset, credit, $23,840 d. Equipment, credit, $238,400
Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the Trucks account as of January 1, 2016: The Accumulated DepreciationTrucks account, previously adjusted to January 1,2016, and duly entered in the ledger, had a balance on that date of 16,460. This amount represented the straight-line depreciation on the four trucks from the respective dates of purchase, based on a 5-year life and no residual value. No debits had been made to this account prior to January 1, 2016. Transactions between January 1,2017, and December 31, 2019, and their record in the ledger were as follows: 1. July 1, 2016: Truck no. 1 was sold for 1,000 cash. The entry was a debit to Cash and a credit to Trucks, 1,000. 2. January 1, 2017: Truck no. 3 was traded for a larger one (no. 5) with a 5-year life. The agreed purchase price was 12,000. Jarrett paid the other company 1,780 cash on the transaction. The entry was a debit to Trucks, 1,780, and a credit to Cash, 1,780. 3. July 1, 2018: Truck no. 4 was damaged in a wreck to such an extent that it was sold as junk for 50 cash. Jarrett received 950 from the insurance company. The entry made by the bookkeeper was a debit to Cash, 1,000, and credits to Miscellaneous Revenue, 50, and Trucks, 950, 4. July 1, 2018: A new truck (no. 6) was acquired for 20,000 cash and debited at that amount to the Trucks account. The truck has a 5-year life. Entries for depreciation had been made at the close of each year as follows: 2016, 8,840; 2017, 5,436; 2018, 4,896; 2019, 4,356. Required: 1. Next Level For each of the 4 years, calculate separately the increase or decrease in earnings arising from the companys errors in determining or entering depreciation or in recording transactions affecting trucks. 2. Prove your work by one compound journal entry as of December 31, 2019; the adjustment of the Trucks account is to reflect the correct balances, assuming that the books have not been closed for 2019.
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