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.

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.

Name: 4) The Main Company requires an estimate of cost of goods lost in a f
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On 31 May 2022, Mars's closing inventory count was valued at a cost of $750,000. This included some…

A: We know that general provision of valuation of inventory is "Inventory is valued at Cost of Net…

Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…

A: Net purchases and beginning inventories are included in the cost of commodities that are offered for…

Q: Year end inventory is valued at £215,000. However, there are several items included within year end…

A: Inventory: It includes all the finished goods available for sale to the ultimate customers and raw…

Q: Some of E and S Electronics' merchandise is gathering dust. It is now December 31, 2024, and the…

A: According to accounting standard, inventory should be valued at lower of cost or market…

Q: Sandhill Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on…

A: Sales are made at 33 1/3% above cost and totaled $111,000. Let the Cost of Goods sold be $x.…

Q: The following relate to God's blessings enterprise for the year ended 31 December 2019. Production…

A: Workings: Given values: Finished goods opening inventory cost = 255000

Q: Flood damaged the merchandise inventory of SM Supermarket on July 25, 2020. You have discovered the…

A: In Accounting we use following equation for closing stock --…

Q: On November 21, 2024, a fire at Hodge Company's warehouse caused severe damage to its entire…

A: Cost of goods sold is the difference between cost of goods available for sale and the ending balance…

Q: Howard's Supply Co. suffered a fire loss on April 20, 2021. The company's last physical inventory…

A: Inventory is considered as current assets of the company. It is considered as most valuable asset as…

Q: Sunland Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on…

A: Solution: Introduction: Inventory means goods are available for sale and raw materials used in the…

Q: On March 31, 2021, the warehouse of Mine Company was destroyed by fire. The company's markup on…

A: Cost of inventory is the total cost incurred to bring the inventory to its present condition. This…

Q: Rahul

A: To compute the cost of goods destroyed, just please follow the following steps: Step 1: Calculate…

Q: Tommy City acquired $17300 of supplies inventory on November 1, 2019, having held no supplies…

A: The inventory is recorded as a perpetual inventory system and periodical inventory system. As per…

Q: Determine the inventory loss as a result of the fire, using the gross profit method. (Round answer…

A: Calculation of average Gross Profit Margin

Q: Crane Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand…

A: Cost of goods sold means the cost of goods which has been actually sold out during the year. When we…

Q: Problem 1 A sale of 250 units was made after purchase 3. Determine the cost of goods available for…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Wildhorse Company reported the following information for November and December 2022. November…

A: Cost of goods sold = Beginning inventory + Cost of goods purchased - Ending inventory…

Q: A fire destroys all of the merchandise -4 of A Company on January , 2020. Presented Below is…

A: Inventory refers to the value of the stock which is computed on the basis of the number of goods and…

Q: Fire occurred at the factory of Burny Corporation on February 16, 2020 which damaged its merchandise…

A: Answer - Computation of estimated value of inventory damaged by fire : Particulars Amt Amount…

Q: On 1st Nov 2020, a business had inventory of $380,000. During the month, sales totalled $650,000…

A: Data given: Opening inventory = $380,000 Purchase during the month= $480,000 Sales during the month…

Q: The financial records of Dream Inc. were destroyed by fire at the end of 2020. Selected information…

Q: Cullumber Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on…

A: 1. Cost of Goods Destroyed - Cost of Goods Destroyed by fire is the goods destroyed and reduced from…

Q: Flood damaged the merchandise inventory of SM Supermarket on July 25, 2020. You have discovered the…

A: Working notes :- Opening inventory 1st Jan 2020…

Q: Sheridan Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on…

A: Cost of goods sold:Cost of goods sold (COGS) refers to the direct costs of producing the goods sold…

Q: Beltrack Co. has a normal gross profit of 45%. On the night of October 5, 2020., welders remodeling…

A: A schedule for the cost of goods is prepared to determine the cost of goods available for sale, the…

Q: Some of E and S Electronics' merchandise is gathering dust. It is now December 31, 2024, and the…

A: Journal entry is the first stage of accounting process.Journal entry used to record business…

Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

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.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On September 28, 2019, a fire destroyed the entire merchandise inventory of Carroll Corporation. The fllowing information is available: What is the estimated inventor)' on September 28, 2019, immediately prior to the fire?
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $22,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $150,000 150,000 230,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. ✓ Answer is complete but not entirely correct. Estimated loss from fire $ 153,200 ×
On April 10, 2023, a fire damaged the office and warehouse of Sill Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2023: Sales Revenue (January 1-March 31, 2023), $180,000; Purchases (January 1- March 31, 2023), $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 related to sales made in prior periods, 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…
On 1st Jan 2006, a business had inventory of $19,000. During the month, sales totalled $32,500 and purchases $24,000. On 31st Jan 2006 a fire destroyed some of the inventory. The undamaged goods in inventory were valued at $11,000. The business operates with a standard gross profit margin of 30%. Based on this information, what is the cost of the inventory destroyed in the fire?
ABC Corporation lost most of its inventory in a fire on April 10, 2020. Its books disclose following data: Inventory, January 1, 2020 Purchases in 2020 Purchases returns Sales Sales returns Purchases discounts Rate of gross profit on sales S180,000 400,000 30,000 650,000 25,000 10,000 30% Through the diligence of the local Fire Department, ABC was able to salvage and merchandise costing $4,000. Required: Calculate the amount of the loss from the fire, to be presented as a claim to th company. Show your computations.
What did i do wrong in my calculations? On November 21, 2021, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $18,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1 $ 130,000 Net purchases from November 1, to the date of the fire 146,000 Net sales from November 1, to the date of the fire 226,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 30% of net sales. Required:Calculate the estimated loss on the inventory from the fire, using the gross profit method. $134,200
Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
Fire occurred at the factory of Burny Corporation on February 16, 2020 which damaged its merchandise inventory. You were given the following data: Inventory, January 1, 2010 P 400,000, Sales (including sales delivered still in transit FOB shipping point, P 50,000) P980,000, Purchases (including those still in transit, Shipped FOB shipping point P 40,000, Shipped FOB destination, P35,000) P700,000. The merchandise saved from fire was estimated to be P 8,500. Burny Corporation's policy is to add 40% on its cost. Compute for the estimated value of inventory damaged by fire. Present solutions in good accounting form.
A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2024 Purchases to date Freight-in Sales to date $ 1,940,000 5,840,000 Estimated loss from fire 440,000 8,600,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
On November 21, 2024, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $26,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1, 2024 $ 170,000 Net purchases from November 1, to the date of the fire 154,000 Net sales from November 1, to the date of the fire 234,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method.
On June 30, 2021, a fire at Norjanna Company’s only warehouse caused severe damage to itsinventory. Based on recent history, Norjanna has a gross profit of 25% on cost. The followinginformation is available from the records for the six months ended June 30, 2021:Inventory – January 1 4,000,000Net purchases 18,000,000Net sales 20,000,000A physical inventory disclosed undamaged goods with selling price of P1,000,000. On June 30, 2021,unsold goods on consignment with selling price of P1,500,000 are in the hands of the consignee. Whatis the estimated cost of inventory destroyed by fire? Judy Company uses the retail inventory method to approximate its ending inventory. The followinginformation is available for the current year: Cost RetailBeginning inventory 650,000 1,200,000Purchases…
Sandhill Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $ 37,240. Purchases since January 1 were $ 70,560; freight-in, $ 3,332; purchase returns and allowances, $ 2,352. Sales are made at 33 1/3% above cost and totaled $ 111,000 to March 9. Goods costing $ 10,682 were left undamaged by the fire; remaining goods were destroyed.