Wallace Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following. Beginning inventory   $170,000   Sales revenue   $650,000   Purchases for the year   390,000   Sales returns   24,000   Purchase returns   30,000   Rate of gross profit on net sales   40 % Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value of $5,300. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss   $

Q: Butterfly Company began October with inventory of $192.000. The business made net purchases of…

A: Gross profit is the difference between sales revenue and cost of goods sold. The cost of goods sold…

Q: Pronghorn Company lost most of its inventory in a fire in December just before the year-end physical…

A: Net Purchases = Purchases for the year - Purchase returns= $295,600 - $27,900= $267,700Net sales =…

Q: The following information is available for October for Barton Company: Beginning inventory $350,000…

A: Compute the cost of goods sold (COGS): Gross profit on sales 40%  66.67% / (100% + 66.67%)…

Q: On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store.…

A: Gross profit means the difference between the sale revenue and cost of production. Sale means the…

Q: Metlock Company lost most of its inventory in a fire in December just before the year-end physical…

A: Formula: Amount of loss = Ending inventory - Undamaged inventory - Net realizable value of damaged…

Q: Compute the amount of the loss as a result of the fire, assuming that the corporation had no…

A: The inventory that is sold or distributed and that has been purchased as finished goods or requires…

Q: A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that…

A: Cost of Goods sold = Sales - Gross profit =$8,200,000-8,200,000*20%  = $6,560,000

Q: Grouper Company lost most of its inventory in a fire in December just before the year-end physical…

A: Lets understand the basics. When inventory gets damaged due to fire then loss due to fire needs to…

Q: corporation's books disclosed the following. Beginning inventory $ 183,500 Sales revenue $683,600…

A: solution : net purchase     =358400 – 30000                              =328400 Net sales…

Q: A fire destroyed the warehouse of Reed Enterprises, on August 31, 20Y1. The books and records of…

A: Gross profit is the difference between the sales and the cost of goods sold. The gross profit ratio…

Q: On April 15 of the current year, a fire destroyed the entire uninsüred are available: Sales, January…

A: Solution: Option(a) . 120,000 is the correct answer. The amount of inventory loss estimated…

Q: Crane Company lost all of its inventory in a fire on December 26, 2022. The accounting records…

A: The cost of goods sold is the formula used to compute the cost incurred on the goods sold during the…

Q: corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase…

A: The cost of goods sold includes the cost of goods that are sold during the period. The ending…

Q: Sheffield Inc.’s April 30 inventory was destroyed by the explosion of an underground oil tank.…

A: working note 1. Gross profit  margin  formula =Gross profit/Net sales * 100 Gross profit will be…

Q: Marigold Corporation's April 30 inventory was destroyed by fire. January 1 inventory was $164,900,…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold. In…

Q: On September 30, 2021, Nueve Company reported that a fire caused severe damage to the entire…

A: Cost of goods sold refers to the amount incurred by an entity in the production process relating to…

Q: Swifty Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $159,400, and…

A: The cost of goods sold represents the total cost of the goods that are required in the production…

Q: Light Trading lost most of its inventory in a fire in December, 2023 just before the year-end…

A: Cost of goods sold means actual cost of goods that are being sold to customers. Gross profit and…

Q: Blue Spruce Corporation's March 31 inventory was destroyed by fire. January 1 inventory was…

A: We assume that all the inventory of 31 March was destryed by the fire.

Q: On June 19, 20X0, a fire destroyed the entire uninsured merchandise inventory of the ABC…

A: Sales revenue is calculated as sum of cost of inventory and mark up value. Net sales is calculated…

Q: . Nectarine Company lost most of its inventory in a fire in December, 2021, just before the year-…

A: The question is related to calculation of loss as a result of fire. We will first calculate the…

Q: Current Attempt in Progress Bonita Company lost most of its inventory in a fire in December just…

A: Amount of loss = Ending inventory - Undamaged inventory - Net realizable value of damaged…

Q: Bluegrass Tonight is a nightclub in Nashville. The informal paring 1 bank reconciliation for the…

A: Bank Reconciliation Statement is prepared when there Bank Balance in Cash Book is different from…

Q: BBM Company lost most of its inventory in a fire in December, 2021, just before the year-end…

A: Gross profit ratio = Gross profit / Sales where, Gross profit = Sales - Cost of goods sold

Q: Compute the amount of the loss as a result of the fire,

A: Amount of loss = Ending inventory - Undamaged inventory - Net realizable value of damaged…

Q: Riverbed Inc.’s April 30 inventory was destroyed by the explosion of an underground oil tank.…

A: The ending inventory is the inventory that is left unsold in the business.

Q: Blue Corporation's April 30 inventory was destroyed by fire. January 1 inventory was $155,000, and…

A: Gross profit means where the cost of goods sold is deducted from net sales. Net profit means where…

Q: A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on…

A: The ending inventory can be calculated by deducting the cost of goods sold from the cost of goods…

Q: Blossom Company lost most of its inventory in a fire in December just before the year-end physical…

A: Inventory management effectively balances the requirement to make items available to consumers while…

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.