On June 13, 20X8, a fire completely destroyed all the inventory of Salmon Lumber Company. Fortunately, the books were not destroyed in the fire. The following information is taken from the books of Salmon Lumber Company for the period January 1, 20X8 through June 13, 20X8. Beginning Inventory, January 1, 20X8 Net Purchases, January 1 through June 13, 20X8 Net Sales, January 1 through June 13, 20X8 Normal gross profit percentage of sales $450,000 $200,000 $350,000 40% The estimated merchandise inventory destroyed in the fire on June 13, 2014, using the gross profit method is: Select one: O a. $210,000 O b. $250,000 O c. $440,000 O d. $240,000

On June 13, 20X8, a fire completely destroyed all the inventory of Salmon Lumber Company. Fortunately, the books were not destroyed in the fire. The following information is taken from the books of Salmon Lumber Company for the period January 1, 20X8 through June 13, 20X8. Beginning Inventory, January 1, 20X8 Net Purchases, January 1 through June 13, 20X8 Net Sales, January 1 through June 13, 20X8 Normal gross profit percentage of sales $450,000 $200,000 $350,000 40% The estimated merchandise inventory destroyed in the fire on June 13, 2014, using the gross profit method is: Select one: O a. $210,000 O b. $250,000 O c. $440,000 O d. $240,000

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1CP

See similar textbooks

Similar questions

On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $305,000; purchases and net sales from the beginning of the year through February 26, $570,000 and $770,000, respectively; gross profit ratio, 25%.Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $220,000; purchases and net sales from the beginning of the year through February 26, $400,000 and $600,000, respectively; gross profit ratio, 30%. Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
On March 15, a fire destroyed MyCompany's entire retail inventory. The inventory on hand as of January 1 totaled $1,650,000. From January 1 through the time of the fire, the company made purchases of $683,000, incurred freight-in of $78,000, and had sales of $1,210,000. Assuming the rate of gross profit to selling price is 30%, what is the approximate value of the inventory that was destroyed ?
A fire completely destroyed the entire inventory of Printing Delight Co. on March 15, 20--. Fortunately, the books were not destroyed in the fire. The following information is taken from the books of Printing Delight Co. for the time period, January 1, 20-- through March 15, 20--: Beginning inventory, January 1, 20-- $45,000Net purchases, January 1, through March 15, 20-- 252,000Net sales, January 1, through March 15, 20-- 378,000Normal gross profit percentage of sales 37%Required: 1. Estimate the cost of goods sold for the time period January 1 through March 15, 20--, using the gross profit method. Estimated cost of goods sold $fill in the blank 56bde601bf83fc2_1238,1402. Estimate the amount of merchandise inventory destroyed in the fire on March 15, 20--, using the gross profit method. Estimated inventory on March 15, 20-- $fill in the blank 044dfbfd0049fde_158,860
The inventory of Swifty Company was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales Revenue $53,000, Sales Returns and Allowances $1,000, Purchases $34,000, Freight-In $1,300, and Purchase Returns and Allowances $1,500.Determine the merchandise lost by fire, assuming: A beginning inventory of $20,000 and a gross profit rate of 32% on net sales. Estimated cost of merchandise lost $enter the Estimated cost of merchandise lost in dollars A beginning inventory of $31,000 and a gross profit rate of 41% on net sales. Estimated cost of merchandise lost $enter the Estimated cost of merchandise lost in dollars
The inventory of Swifty Company was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales Revenue $53,000, Sales Returns and Allowances $1,000, Purchases $34,000, Freight-In $1,300, and Purchase Returns and Allowances $1,500.Determine the merchandise lost by fire, assuming: A beginning inventory of $20,000 and a gross profit rate of 32% on net sales. Estimated cost of merchandise lost $enter the Estimated cost of merchandise lost in dollars
On February 26 a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $220,000; purchases and net sales from the beginning of the year through February 26, $400,000 and $600,000, respectively; gross profit ratio, 30%. Estimate the cost of the inventory destroyed by the hurricane using the gross profit method. Beginning inventory Plus: Net purchases Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyed
On June 30, a fire destroyed Intense Company's entire inventory. The inventory on January 1 totaled P6,600,000. From January 1 through the time of the fire, the entity made purchases of P3,000,000, incurred freight in of P300,000, and had sales of P7,800,000. The rate of gross profit on selling price is 30%. What is the approximate cost of the inventory that was destroyed? 3,600,000 C. 4,140,000 3,900,000 D. 4,440,000
On February 7 of the following year,the merchandise inventory was destroyed by fire based on the following data obtained from the accounting records,estimate the cost of the merchandise destroyed: Jan 1 merchandise inventory 140,600 Jan 1-Feb 7 purchase (net) 38,000 Jan 1-Feb sales (net)........68,000 Estimated gross profit rate ....40%
On June 19, 20X0, a fire destroyed the entire uninsured merchandise inventory of the ABC Merchandising Company. The following data are available:Inventory, January 1 - P 90,000Purchases, January 1 through June 19 - 660,000Sales, January 1 through June 19 - 876,000Sales discount – 6,000Markup percentage on cost - 20%What is the approximate inventory loss as a result of the fire?
On June 19, 20X0, a fire destroyed the entire uninsured merchandise inventory of the ABC Merchandising Company. The following data are available:Inventory, January 1 - P 90,000Purchases, January 1 through June 19 - 660,000Sales, January 1 through June 19 - 876,000Sales discount – 6,000Markup percentage on cost - 20%What is the approximate inventory loss as a result of the fire? PS. I answered 25,000 and it is wrong.
On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $216,400. Inventory purchased during August was $192,910. Net Sales for the month of August were $544,400. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.