Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 5, Problem 22QS
Confucious Bookstore’s inventory is destroyed by a fire on September 5. The following data for the current year are available from the accounting records. Estimate the cost of the inventory destroyed.
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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 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, $230,000; purchases and net sales from the beginning of the year through February 26, $420,000 and $620,000, respectively; gross profit ratio, 40%.Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
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%
Chapter 5 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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- 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 destroyedarrow_forwardMuller Computers stores its inventory in a warehouse that burned to the ground in late November, 2018. Their sales office was at a different location. In order to file a claim with their insurance, the owners ask you to estimate the inventory that was in the warehouse. The following information is available: Beginning Inventory 375,000 Purchases through November 30 470,250 Net sales revenue through november 30 793,000 The company's gross profit has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method. a.$528,550 b.$388,450 c.$369,950 d.$410,000arrow_forwardOn 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 ?arrow_forward
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