Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Fruit Toppings Marshmallow Chocolate Fruit Toppings $ 12,000 110,000 160,000 Required: 1. Calculate the estimated cost of each of the toppings lost in the fire. Estimated cost of lost inventory 30% Marshmallow Toppings $ 6,200 28,000 47,000 35% Chocolate Toppings $ 2,200 11,200 19, 200 40%
Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Fruit Toppings Marshmallow Chocolate Fruit Toppings $ 12,000 110,000 160,000 Required: 1. Calculate the estimated cost of each of the toppings lost in the fire. Estimated cost of lost inventory 30% Marshmallow Toppings $ 6,200 28,000 47,000 35% Chocolate Toppings $ 2,200 11,200 19, 200 40%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire
resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company
with an estimate of the amount of inventory lost. The following information is available from the company's accounting records:
Inventory, January 1, 2024
Net purchases through November 17
Net sales through November 17
Historical gross profit ratio
Fruit
Required:
1. Calculate the estimated cost of each of the toppings lost in the fire.
Toppings
Marshmallow
Chocolate
Fruit Toppings
$ 12,000
110,000
160,000
30%
Estimated cost of lost
inventory
Marshmallow
Toppings
$ 6,200
28,000
47,000
35%
Chocolate
Toppings
$ 2,200
11, 200
19, 200
40%
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