wenty percent of the inventory contained in the warehouse has been salvaged from the fire while half is partially damaged and can be sold as scrap at thirty percent of its cost. How much is the inventory loss due to the fire?
wenty percent of the inventory contained in the warehouse has been salvaged from the fire while half is partially damaged and can be sold as scrap at thirty percent of its cost. How much is the inventory loss due to the fire?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On October 1, 2021, the warehouse of ABC Co. and all inventories contained therein were razed by fire.
Off-site back up of database shows the following information:
Inventory, Jan. 1 20,000
Net purchases 190,000
Net sales from Jan. to Sept. 240,000
Gross profit rate based on cost 25%
Twenty percent of the inventory contained in the warehouse has been salvaged from the fire while half is
partially damaged and can be sold as scrap at thirty percent of its cost. How much is the inventory loss
due to the fire?
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