Assume that the following was extracted from Massy’s accounting information system for operations at this outlet for the week, up to the time of the fire. $ $ Sales 830,000 Purchases Returns 56,000 Purchases 580,000 Beginning Inventory 160,000 Sales Returns 42,000 The company’s gross profit percent based on net selling price is 40%. Merchandise with a selling price of $60,000 remainded undamaged after the fire. Some smoke damaged merchandise has a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profit method, for insurance purposes. Required: Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.
Assume that the following was extracted from Massy’s
$ $
Sales 830,000 Purchases Returns 56,000
Purchases 580,000 Beginning Inventory 160,000
Sales Returns 42,000
The company’s gross profit percent based on net selling price is 40%. Merchandise with a selling price of $60,000 remainded undamaged after the fire. Some smoke damaged merchandise has a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profit method, for insurance purposes.
Required: Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
