Adams Corporation estimates that it lost $75,000 in inventory from a recent flood. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $150,000; purchases and net sales from the beginning of the year through the date of the flood, $450,000 and $700,000, respectively. What is the company’s gross profit ratio?

Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…

A: Given,  Gp ratio = 40% = 100 * Gross profit / Net sales Purchase = 420000 Net sales = 620000…

Q: The following information is available for Splish Brothers Inc. for the year ended December 31,…

A: Gross profit = Sales revenue - Cost of goods sold Net Income = Income from continuing operations -…

Q: On February 26 a hurricane destroyed the entire inventory stored in a warehouse owned by the…

A: Cost of inventory destroyed can be found out by applying the gross profit ratio on sale and finding…

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

A: Cost of goods available for sale =      Beginning inventory + net purchases

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

A: Net sales = Sales revenue - Sales returns = $415000 - $21000 = $394000 Gross profit = Net sales x…

Q: A fire in July, just before the year-end physical inventory, destroyed the majority of GH…

A: Gross profit is the sales revenue which is over and above cost of goods sold. Cost of goods sold…

Q: During its first and second years of operations, Explorer Company, a corporation using a periodic…

A: Inventory is one of the current asset of the business, which is reported in the balance sheet of the…

Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…

A: Gross Profit Method:   Under this method, the beginning inventory is added to the net purchases…

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: The inventory of Swifty Company was destroyed by fire on March 1. From an examination of the…

A: Net Purchase cost = Purchases for the year - Purchase returns + Freight = $34,000 - $1,500 - $1,300…

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: Eastman 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 = $290,000 - $28,000 = $262,000 Net sales…

Q: 2021   2020   Net sales   $630,000   $390,000   Cost of goods purchased   383,400   269,600…

A: Gross Profit is the excess of revenue over cost of goods sold. Gross Profit margin is a…

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, 2016, a flood destroyed the entire merchandise inventory on hand in a warehouse…

A: Gross profit method:

Q: The inventory of Swifty Company was destroyed by fire on March 1. From an examination of the…

A: For calculating the ending inventory , we need to prepare the trading account.

Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…

A: The gross profit approach is a method of determining the volume of finishing inventory in a given…

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: Presented below is information related to Bramble Corp. for the year 2020. Net sales   $1,378,000…

A: Income statement which categorized income and expenses into operating and non-operating expenses is…

Q: Determine the inventory loss as a result of the fire, using the gross profit method. (Round answer…

A: Calculation of average Gross Profit Margin

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 April 10, 2022, fire damaged the office and warehouse of Sheffield Company. Most of the…

A: Cash sales / purchases are where cash is out-rightly paid or received  Credit sales / purchases on…

Q: Fosbre Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $150,000, and…

A: Step 1: Calculate the cost of goods sold.

Q: At the beginning of the year, the inventory of a convenience store was 189,950. The purchases made…

A: Here in this question, we are required to calculate net profit/loss from the convenience store. Net…

Q: Ebbers Corporation overstated its ending inventory balance by $15,000 in the current year. What…

A:

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: Alexandria Company provided the following data for the current year: Inventory end of the fiscal…

A: Cost of Goods Manufactured is a schedule or statement which shows the total production costs of…

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

A:

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: The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2020. Fortunately,…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: The financial records of AGRIGASYA 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: On June 30, a fire destroyed Intense Company's entire inventory. The inventory on January 1 totaled…

A: Cost of goods sold = P7800000 × 70%       =   P5460000

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: If Soda Popinski's Company's ending inventory was actually $86,000 but was adjusted at year end to a…

A: Cost of good sold = Opening inventory + Purchases + Direct expenses - Closing inventory.   So,…

Q: A fire in July, just before the year-end physical inventory, destroyed the majority of GH…

A: Cost of goods sold means cost incurred for the purpose of sales of goods. Gross profit is the sales…

Q: On September 22, 2018, a flood destroyed the entire merchandise inventory on hand in a warehouse…

A: Estimated gross profit = Net sales x Gross profit rate = $570,000 x 30% = $171,000

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

A: Inventory can be calculated by deducting the cost of goods sold from a total beginning inventory and…

Q: Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was…

A: Gross profit = $745,200*40% Gross profit = $298,080

Q: Below is a partial listing of the adjusted account balances of Atlantic Department Store at year end…

A: Multi-step Income Statement: It shows a detailed bifurcation of the revenues and expenses and shows…

Q: Clover Company, a corporation using a periodic inventory system, made undiscovered errors in taking…

A: Basic Accounting Concept Note for this question: Overstatement of Ending or Closing Inventory leads…

Q: The Board of Directors decides that old inventory costing €18,000 is to be written off as the…

A: As per international financial reporting standards  Inventory is to be measured at cost or net…

Q: .  Northstar Sales Corp. was organized on January 1, 2001. On December 31, 2002, the company lost…

A: In this case to compute the loss inventory due to fire by using the gross profit method. To…

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.