Brad Essary owned a small company that sold garden equipment. The equipment was expensive, and a perpetual system was maintained for control purposes. Even so, lost, damaged, and stolen merchandise normally amounted to 4 percent of the inventory balance. On June 14, Essary's warehouse was destroyed by fire. Just prior to the fire, the accounting records contained a $166,000 balance in the Inventory account. However, inventory costing $11,800 had been sold and delivered to customers but had not been recorded in the books at the time of the fire. The fire did not affect the showroom, which contained inventory that cost $42,100. Required Estimate the amount of inventory destroyed by fire. Inventory destroyed by fire
Brad Essary owned a small company that sold garden equipment. The equipment was expensive, and a perpetual system was maintained for control purposes. Even so, lost, damaged, and stolen merchandise normally amounted to 4 percent of the inventory balance. On June 14, Essary's warehouse was destroyed by fire. Just prior to the fire, the accounting records contained a $166,000 balance in the Inventory account. However, inventory costing $11,800 had been sold and delivered to customers but had not been recorded in the books at the time of the fire. The fire did not affect the showroom, which contained inventory that cost $42,100. Required Estimate the amount of inventory destroyed by fire. Inventory destroyed by fire
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1CP
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Transcribed Image Text:Brad Essary owned a small company that sold garden equipment. The equipment was expensive, and a perpetual system was
maintained for control purposes. Even so, lost, damaged, and stolen merchandise normally amounted to 4 percent of the inventory
balance. On June 14, Essary's warehouse was destroyed by fire. Just prior to the fire, the accounting records contained a $166,000
balance in the Inventory account. However, inventory costing $11,800 had been sold and delivered to customers but had not been
recorded in the books at the time of the fire. The fire did not affect the showroom, which contained inventory that cost $42,100.
Required
Estimate the amount of inventory destroyed by fire.
Inventory destroyed by fire
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