A company's inventory was destroyed in a fire on January 28, 2021. The company's December 31, 2020 inventory had a cost of $40,000. The company's gross profit has consistently been 30% of sales. During January the company purchased merchandise costing $36,000 and sales of $50,000 at regular selling prices. What is the estimated cost of the inventory that was destroyed on January 28, 2021?   Select one: A. $41,000 B. $35,000 C. $26,000 D. $45,000

Q: ABC Company's accounting records indicated the following information for 2020: Inventory, January 1…

A: Inventory is the stock of raw materials or finished goods held by a firm at a point of time.…

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: On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its…

A: Merchandising inventory is the current asset of the firm and is the goods in which is firm is…

Q: On June 30, 2021, a fire at Norianna Company's only warehouse caused severe damage to its inventory.…

A: Estimated cost of inventory destroyed by fire = Beginning inventory + Purchases - Cost of goods sold…

Q: Wallace 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 = $390,000 - $30,000 = $330,000 Net sales…

Q: Lily Company needs to determine the amount of inventory in its warehouse at the time that an…

A: Cost of goods available for sale = Beginning inventory + purchases Cost of goods sold = Sales -…

Q: On March 15, a fire destroyed MyCompany's entire retail inventory. The inventory on hand as of…

A: Cost of goods sold = Beginning inventory + Purchases + Freight in - Closing inventory

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: Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods…

A: (1) Compute the Sparrow's ending inventory and cost of goods sold using the retail inventory method…

Q: Bartleby Graduate Inc. was organized on January 1, 2020. On December 31, 2021, the company lost most…

A: Solution-1   Inventory January 1, 2020 P0 Add: Purchases P8,90,000 Less: Purchase return and…

Q: 12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost a warehouse…

A: Inventory means the amount of stock which is held for used in production or for resale purpose.…

Q: On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse…

A: Cost of Goods sold = Net sales - Gross profir = $550,000 - $550,000*25% = $412,500

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: 12. Chimwasu Ltd sells pure olive oil to wholesale shops in the Kitwe Business District. During the…

A: The inventory can be valued using various methods as FIFO, LIFO and average method.

Q: The home office consistently bills its branch for shipments at 120% of cost. On September 21, 2021,…

A: Whenever head office sells goods to its branch it will add certain markup on cost price. Such markup…

Q: On September 30, 2020, a fire at Cherimoya Company’s warehouse caused severe damage to its entire…

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

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: On March 17, 2021, a flood destroyed the entire inventory of Beatty Co. The following information is…

A:

Q: Adams Corporation estimates that it lost $75,000 in inventory from a recent flood. The following…

A: Ratio analysis is a method of measuring the financial position of the organization with different…

Q: On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse…

A: Destroyed ending inventory can be calculated by deducting the estimated cost of goods sold from 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: On September 30, 2020, a fire at Cherimoya Company’s warehouse caused severe damage to its entire…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: On November 21, 2021, a fire at Hodge Company’s warehouse caused severe damage to its entire…

A: Calculation of estimated loss: Inventory, November 1 $100,000 Net Purchases (from records)…

Q: A fire destroys all of the merchandise of Assante Company on February 10, 2020. Presented below is…

A: Closing stock = Cost of goods available for sale - Cost of goods sold First we need to calculate…

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

A: Loss: It is an excess of expenses over firm revenue from single or multiple transactions that arise…

Q: How much is the net income (net loss) during 2020?

A: Net income is  company's total profits after deducting all business expenses.

Q: On September 30, 2020, a fire at Cherimoya Company’s warehouse caused severe damage to its entire…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: On September 28, 2019, a fire destroyed the entire merchandise inventory of the Alfonso Corporation.…

A: Cost of goods sold = Sales / (1 + Markup) = P540,000 / (1+0.20) = P450,000

Q: A company's inventory was destroyed in a fire on January 28, 2020. The company's December 31, 2019…

A: Cost of goods sold = Sales - Gross profit where, Gross profit = Sales x Gross profit rate

Q: On June 30, 2021, a fire at Norianna Company's only warehouse caused severe damage to its inventory.…

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

Q: On September 30, 2020, a fire at Cherimoya Company's warehouse caused severe damage to its entire…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: n September 30, 2020, a fire destroyed most of merchandise inventory of Karrie Company. All goods…

A: solution : step 1 first let us calculate average gross profit of past three years total sale =…

Q: On March 1, AYE Merchandising had an inventory of P560,000 in its retail store. Purchases made in…

A: Loss by Fire - Loss by fire or any other natural calamities is an extraordinary loss for the…

Q: On October 31, 2010, a flood at Pamela Company’s only warehouse caused severe damage to its entire…

A: Cost of goods sold:- It refers to the direct cost of producing the goods sold by a company. This…

Q: 16.On March 31, 2021, the warehouse of Cucumber Company was destroyed by fire. The company's…

A: Opening balance = P600,000 Sales = P2240000 Markup = 40% Cost of sales = 2240000*0.40/(1+0.40)…

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

A: Income statement:   It is a financial statement that calculates the net income generated by the…

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: 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: 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: Luke's Lamps had a beginning inventory January 1, 2020 of $970,000.  They sold goods that cost…

A: Cost of goods sold is calculated by adding beginning inventory and purchases and deducting ending…

Q: On 1st Jan 2006, a business had inventory of $19,000. During the month, sales totalled $32,500 and…

A: Here, we need to use the retail gross profit method to assess thr loss. This method is used by the…

Q: On September 30, 2020, a fire at Gray Company’s warehouse caused severe damage to its entire…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its…

A: Goods sent on a consignment basis refers to when goods are sent by the owner (consignor) to an agent…

Q: On September 22, 2021, a flood destroyed the entire merchandise Inventory on hand in a warehouse…

A: Cost of goods sold = Sales Revenue - Gross Profit

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

A: Goods are sent to buyer on either one of the FOB basis. It can FOB destination or FOB shipping…

Q: On June 30, 2021, a fire at Norjanna Company’s only warehouse caused severe damage to its inventory.…

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

Q: California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1,…

A: COGS % = 1 - Gross profit% Cost of goods available for sale = Beginning inventory + purchases Ending…

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.