5. On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints. Physical inventory figures were published as follows: As of January 1, 2019AS of May 31, 2019 P15,000 P50,000 Raw Materials P 30,000 Work-in-process Finished Goods P70,000 P 60,000 Sales for the first five months of 2019 were P150,000. Raw materials purchased were P50,000. Freight on purchases was P5,000. Direct labor for the five months was P40,000. To determine the value of the lost inventory, the insurance adjusters have agreed to use an average gross profit rate of 32.5%. Assume that manufacturing overhead was 45% of direct labor cost. A. Compute the value of the destroyed work-in-process inventory as determined by the insurance adjusters.

5. On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints. Physical inventory figures were published as follows: As of January 1, 2019AS of May 31, 2019 P15,000 P50,000 Raw Materials P 30,000 Work-in-process Finished Goods P70,000 P 60,000 Sales for the first five months of 2019 were P150,000. Raw materials purchased were P50,000. Freight on purchases was P5,000. Direct labor for the five months was P40,000. To determine the value of the lost inventory, the insurance adjusters have agreed to use an average gross profit rate of 32.5%. Assume that manufacturing overhead was 45% of direct labor cost. A. Compute the value of the destroyed work-in-process inventory as determined by the insurance adjusters.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The work-in process inventory of Martinez Manufacturing was completely destroyed by fire on May 1, 2019. The physical inventory count as of that date is presented below: January 1 May 1 Raw Materials P 40,000 P 60,000 Work in Process 101,500 - Finished Goods 140,000 125,000 Sales from January 1 to April 30 were P300,000. Purchases of raw materials were P100,000 and freight on purchases, P10,000. Direct labor during the period was P80,000. It was agreed with the insurance adjusters that an average gross profit rate of 35% be used and…
On June 30, 2019, a flash flood damaged the warehouse and factory of Padway Corporation, completely destroying the work-in-process inventory. There was no damage to either the raw materials or finished goods inventories. A physical inventory taken after the flood revealed the following valuations: Raw materials $ 62,000 Work in process 0 Finished goods 119,000 The inventory on January 1, 2019, consisted of the following: Raw materials $ 30,000 Work in process 100,000 Finished goods 140,000 $270,000 A review of the books and records disclosed that the gross profit margin historically approximated 25% of sales. The sales for the first six months of 2019 were $340,000. Raw material purchases were $115,000. Direct labor costs for this period were $80,000, and manufacturing overhead was historically applied at 50% of direct labor. Required: Compute the value of the work-in-process inventory lost at June 30, 2019.
On September 30, 2019, a flash flood damaged the warehouse and factory Of Waltermart, Inc. completely destroying its work in process inventory. There was no damage to either raw materials or finished goods since these were stored in an elevated section of the warehouse. A physical inventory taken immediately after the flood subsided showed the following: Raw materials — P740,000; Finished goods — P1,310,00. Inventories at January 1, 2019 consisted of the following: Raw Materials — P400,000; Work in Process — P1,100,000; Finished Goods - P1,500,000. The company's profit margin for the last several years is 25%. Sales for the first nine months of 2019 were P4,000,000. Raw materials purchases were P1,280,000. Direct labor cost for the period amounted to P960,000. Manufacturing overhead is applied at 50% of direct labor cost. What is the value of the work in process lost from flood at September 30, 2019? a. P580,000 b. P640,000 c. P670,000 d. P720,000 WITH EXPLANATION PLS!
7.On March 31, 2021, the warehouse of Cucumber Company was destroyed by fire. The company's markup on cost is 40%. The following information was obtained from the available records:Inventory, 12/31/2020 - P600,000Sales for the 1st quarter - P2,240,000Purchases for the 1st quarter - P1,750,000What is the cost of inventory immediately before the fire?
On March 31, 2021, the warehouse of Mine Company was destroyed by fire. The company's markup on cost is 40%. The following information was obtained from the available records:Inventory, 12/31/2020 - P600,000Sales for the 1st quarter - P2,240,000Purchases for the 1st quarter - P1,750,000What is the cost of inventory immediately before the fire?
53.The work-in-process inventory of YYY Company were completely destroyed by fire on June 1, 2020. You were able to establish physical inventory figures as follows: January 1, 2020 June 1, 2020 Raw materials P 60,000 P120,000 Work-in-process 200,000 - Finished goods 280,000 240,000 Sales from January 1 to May 31, were P546,750. Purchases of raw materials were P200,000 and freight on purchases, P30,000. Direct labor during the period was P160,000. It was agreed with insurance adjusters than an average gross profit rate of 35% based on cost be used and that direct labor cost was 160% of factory overhead. The work in process inventory destroyed as computed by the
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Wormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.
On September 30, 2020, a fire at Cherimoya Company’s warehouse caused severe damage to its entire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Cherimoya estimates can be sold to a jobber for P50,000. The following information is available from Cherimoya’s records for the nine months ended September 30, 2020.Inventory, Jan. 1 - P550,000Total purchases recorded, Jan. 1 – Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000Freight in - P60,000Purchase returns - P200,000Purchase discounts - P80,000Total sales delivered and recorded, Jan. 1 – Sept. 30 - P3,900,000Sales returns - P160,000Sales discounts - P40,000Using the gross profit method, how much is the inventory loss?
On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories contained therein were razed by fire. Amounts for the following accounts have been established:Jan 01- Accounts payable 125,000.00- Raw materials 23,000.00- Work in process 63,000.00- Finished goods 55,500.00September 30- Accounts payable 146,500.00- Raw materials 28,000.00- Work in process ?- Finished goods 61,000.00The following additional information was determined:- Payments for purchases on account - 100,000.00- Freight on purchases - 12,000.00- Purchase returns 15,000.00- Direct labor 42,000.00- Manufacturing overhead 21,000.00- Sales from January to June 29 290,000.00- Sales returns 15,000.00- Sales discounts 29,000.00- Gross profit rate based on sales 40%Work in Process at September 20x1 is
On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories contained therein were razed by fire. Amounts for the following accounts have been established:Jan 01- Accounts payable 125,000.00- Raw materials 23,000.00- Work in process 63,000.00- Finished goods 55,500.00September 30- Accounts payable 146,500.00- Raw materials 28,000.00- Work in process ?- Finished goods 61,000.00The following additional information was determined:- Payments for purchases on account - 100,000.00- Freight on purchases - 12,000.00- Purchase returns 15,000.00- Direct labor 42,000.00- Manufacturing overhead 21,000.00- Sales from January to June 29 290,000.00- Sales returns 15,000.00- Sales discounts 29,000.00- Gross profit rate based on sales 40%Cost of goods manufactured is
On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories contained therein were razed by fire. Amounts for the following accounts have been established:Jan 01- Accounts payable 125,000.00- Raw materials 23,000.00- Work in process 63,000.00- Finished goods 55,500.00September 30- Accounts payable 146,500.00- Raw materials 28,000.00- Work in process ?- Finished goods 61,000.00The following additional information was determined:- Payments for purchases on account - 100,000.00- Freight on purchases - 12,000.00- Purchase returns 15,000.00- Direct labor 42,000.00- Manufacturing overhead 21,000.00- Sales from January to June 29 290,000.00- Sales returns 15,000.00- Sales discounts 29,000.00- Gross profit rate based on sales 40%Determine the loss on fire assuming P4,000 worth of scrap are recovered but realized for P3,000.