Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) $ 80,000 Sales revenue $415,000 Purchases 290,000 Sales returns 21,000 Purchase returns 28,000 Gross profit % based on net selling price 35% Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory. Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)
Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following. Inventory (beginning) $ 80,000 Sales revenue $415,000 Purchases 290,000 Sales returns 21,000 Purchase returns 28,000 Gross profit % based on net selling price 35% Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory. Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 67P
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Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.
Inventory (beginning) | $ 80,000 | Sales revenue | $415,000 | ||||
Purchases | 290,000 | Sales returns | 21,000 | ||||
Purchase returns | 28,000 | Gross profit % based on net selling price | 35% |
Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory.
Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)
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