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Century 21 Accounting Multicolumn Journal

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1CP

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The merchandise inventory this question solution general accounting

The merchandise inventory was destroyed by fire on
December 13. The following data were obtained from the
accounting records:
Jan. 1
Merchandise inventory
$295,000
Jan. 1-Dec. 13 Purchases (net)
$1,973,000
Sales (net)
$3,600,000
Estimated gross profit rate 44%
Estimate the cost of the merchandise destroyed.

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The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records: Merchandise inventory $ 350,000 Jan. 1 Jan. 1-Dec. 31 Purchases (net) 2,950,000 Sales 4,440,000 Estimated gross profit rate 35% a. Estimate the cost of the merchandise destroyed. b. Briefly describe the situations in which the gross profit method is useful.
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On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: Sales, January 1 through April 15 $300,000 Inventory, January 1 50,000 Purchases, January 1 through April 15 250,000 Markup on cost 25% The amount of the inventory loss is estimated to be $
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