E9.14B (L0 4) (Gross Profit Method) Wineview Company lost most of its inventory in a fire in December just before the yearend physical inventory was taken. The corporation’s books disclosed the following. Beginning inventory $210,000 Sales $970,000 Purchases for the year 805,000 Sales returns 71,000 Purchase returns 15,000 Rate of gross margin on net sales 20% Merchandise with a selling price of $51,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $25,000 had a net realizable value of $2,500. Instructions Compute the amount of the loss as a result of the fire, assuming that the company had no insurance coverage.

Q: 1. Teel Distribution Co. has determined its December 31, 2007 inventory on a FIFO basis at $250,000.…

A: The Inventory valuation and loss on valuation has been computed as above.

Q: 1,700,000 Purchases - 3,900,000 Purchase return - 300,000 Sales - 6,500,000 Sales returns - 240,000

A: Valuation of closing inventory: Valuation of closing inventory based on gross profit value and rate…

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: . Cost of goods sold is P7,400. Beginning inventory is P3,500 and ending 1. inventory is P4,000. If…

A: The cost of goods sold can be calculated by adding up net purchase and freight and deducting closing…

Q: E6-2 Farley Bains, an auditor with Nolls CPAs, is performing a review of Ryder Company's nventory…

A: Step 1 Inventory cost must be determined to find the correct value of product

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

A: The merchandise loss can be incurred due to fire or theft, etc. This loss can be estimated with the…

Q: On 31/12/2013, the cost of inventory was 54000, and the Fair value (estimated selling price) was…

A: There are different inventory valuation methods such as FIFO, LIFO, weighted average inventory…

Q: inventory

A: Introduction: Ending inventory for a company generally indicates the balance goods which are…

Q: a) Shahi Foods & Spices Company purchased goods for OMR 25,000 and sold 70% of such goods during the…

A: Note: As per the policy we are supposed to solve one question at a time. Kindly repost the further…

Q: corporation's books disclosed the following. Beginning inventory $ 183,500 Sales revenue $683,600…

A: solution : net purchase     =358400 – 30000                              =328400 Net sales…

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: E8-24 (L05) (Inventory Errors-Periodic) Ann M. Martin Company makes the following errors during the…

A: Effect of error on Working capital of the current and subsequent year:In current year, the Purchases…

Q: P3,000,000, and the allowance for inventory writedown before At year-end, Julie Company reported…

A: Computation of the amount of loss on inventory writedown should be included in cost of goods sold is…

Q: 9. On October 31, 2020, ABC Company reported that a flood caused severe damage to the entire…

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

Q: A company using the perpetual inventory system purchased inventory worth $24,000 on account with…

A: Inventory refers to the goods that are available for sale or available for further production.

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: P9-4B (L05) (Gross Profit Method) Higgs Company lost most of its inventory in a fire in November…

A: The retail inventory technique is an accounting approach for estimating the worth of products in a…

Q: PB7-2 (Algo) Evaluating the Income Statement and Income Tax Effects of Lower of Cost or Market/Net…

A:

Q: Bao Company lost all of its inventory in a fi re on December 26, 2017. The accounting records…

A: Gross profit Rate=Gross profitNet Sales×100

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

A: 1. Income statement:   It is a financial statement that calculates the net income generated by the…

Q: E12 -6 On 10 June 20X6, a fire occurred in the warehouse of John Bathloi. His financial year ends on…

A:

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: The cost of Product E sold for the year ended July 31,2021 is: d. P1,350,000 b. P1,440,000 c.…

A: As per NRV method, the net realizable value at split off point is used to allocate the joint cost.

Q: On June 19, 20X0, a fire destroyed a fraction of the uninsured merchandise inventory of the ABC…

A:

Q: he following information is available for October for Pharoah Company. (Round answers to 0 decimal…

A: solution: given Beginning inventory $320000 Net purchases 1040000 Net sales…

Q: Bonita Inc. took a physical inventory at the end of the year and determined that $845000 of goods…

A: Inventory at the end of financial year to be shown in balance sheet , should means the inventory ,…

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: 1. On October 21, 2020, a fire destroyed the entire uninsured merchandise inventory of the Renan…

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

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: On December 31, 2020 Mega Nhon Company changed its method of accounting for inventory from weighted…

A: Basic Closing inventory increase the gross profit which in turn increase the net profit.  Tax is…

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: Two different companies, Vogel Corporation and Hatcher Corporation, entered into the following…

A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Q: E9-13 (Gross Profit Method) Zidek Corp. requires an estimate of the cost of goods lost by fire on…

A: Cost of goods include all the cost that incurred during production.

Q: Strand Corp lost its inventory in a fire and they have asked you to calculate the value of Ending…

A: Answer) Calculation of Value of ending inventory Cost of Goods Sold = Beginning inventory + Net…

Q: 3. The following records were taken from the books of the Company and its branch on December 31,…

A: Expenses of HO = P382,000 Expenses of Branch = P101,500 HO Billed the branch at 120% of the cost.…

Q: Shahi Foods & Spices Company purchased goods for OMR 25,000 and sold 70% of such goods during the…

A: The question is based on the concept of the Accounting Theory.

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: The financial record of Adam Inc were destroyed by fire at the end of 2020. Fortunately, the…

A: The financial record of Adam Inc were destroyed by fire at the end of 2020. Fortunately, the…

Q: Bao Company lost all of its inventory in a fi re on December 26, 2017. The accounting records…

A: Cost of goods sold is calculated by adding the opening inventory and purchases and subtracting the…

Q: AFW inc. reported these figures for its fiscal year (amounts in millions): Net sales $2,100 Cost of…

A: If the Ending Inventory is overstated therefore Cost of Goods Sold is Understated. Cost Of Goods…

Q: On January 1, 2022, Roseland Company experienced a decline in the value of inventory resulting in…

A: In the context of the given question, we compute the required answers as follows: Direct write off…

Q: he following data were available for ABC Corp at Dec 31, 20X2: Net purchases    P345,000 Inventory,…

A: Inventory is the current asset of an entity. These are the resources held by an entity for the…

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.