ACC 301 Gross Profit MethodRaynor Company lost most of its inventory in a fire just before the company was to takeit's year-end physical inventory. The company's records disclosed the following.Beginning inventoryPurchasesPurchase returns80,000290,00028,000Gross profit based on selling price = 35%Sales revenueSales returns415,00021,000Merchandise with a selling price of $80,000 was not damaged by the fire. Thedamaged merchandise has a net realizable value of $8,150.Required:Prepare a schedule computing the fire loss (Do not use the retail inventory method)

Cost of goods sold means the cost of goods which has been actually sold out during the year. When we…

Answered: ACC 301 Gross Profit Method Raynor…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Current Attempt in Progress Tamarisk Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns Amount of the loss $ eTextbook and Media $166,700 375,300 28,900 Save for Later Sales revenue Sales returns Rate of gross profit on net sales Merchandise with a selling price of $22,400 remained undamaged after the fire. Damaged merchandise with an original selling price of $16,400 had a net realizable value of $4,800. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. $622,700 23,400 20 % Attempts: 0 of 3 used Submit Answer
Pronghorn 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) Purchases. Purchase returns $81,000 295,600 27,900 Inventory fire loss $ Sales revenue Sales returns Gross profit % based on net selling price $407,900 20,700 32 % Merchandise with a selling price of $29,400 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,000. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
A fire on 30 September 20X2 destroyed some of a company's inventory and its inventory records. The following information is available: $ Inventory 1 September 20X2 318,000 Sales for September 20X2 612,000 Purchases for September 20X2 412,000 Inventory in good condition at 30 September 20X2 214,000 Standard gross profit percentage on sales is 25% Based on this information, what is the value of the inventory lost? A $96,000 B $271,000 C $26,400 D $57,000
PROBLEM 40: O00 Company uses the retail inventory method. At the end of the current year, 000 Company suffered a fire loss that destroyed most of its inventory. After the fire, only goods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000 was salvaged. The following information is available prior to the fire: Cost P 1,100,000 P 2,200,000 15,800,000 26.300,000 540,000 Retail Beginning inventory Purchases Freight in Purchase returns Purchase allowances Departmental transfer in Markups Cancelation of markdown 600,000 300,000 1,000,000 400,000 800,000 300,000 100,000 900,000 800,000 Departmental transfer out Markdowns 350,000 Cancelation of markup Sales Sales returns Sales discounts 50,000 24,700,000 350,000 200,000 100,000 Sales allowances Employee discounts Normal wastage 600,000 5% of sales 33. What is the estimated fire loss if o00 Company appies the conservative retail approach? 34. What is the estimated cost of goods sold if O00 Company applies…
Indigo Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns Amount of the loss $ tA $172,400 406,400 27,100 Sales revenue Sales returns Rate of gross profit on net sales Merchandise with a selling price of $21,300 remained undamaged after the fire. Damaged merchandise with an original selling price of $14,600 had a net realizable value of $5,200. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. $621,100 174430 22,800 30 %
PROBLEM 40: OOO Company uses the retail inventory method. At the end of the current year, OOO Company suffered a fire loss that destroyed most of its inventory. After the fire, only goods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000 was salvaged. The following information is available prior to the fire: Cost Retail Beginning inventory P 1,100,000 P 2,200,000 Purchases 15,800,000 26,300,000 Freight in 540,000 Purchase returns 600,000 1,000,000 Purchase allowances 300,000 Departmental transfer in 400,000 800,000 Markups 300,000 Cancelation of markdown 100,000 Departmental transfer out 350,000 900,000 Markdowns 800,000 Cancelation of markup 50,000 Sales 24,700,000 Sales returns 350,000 Sales discounts 200,000 Sales allowances 100,000 Employee discounts 600,000 Normal wastage 5% of sales 33. What is the estimated fire loss if OOO Company applies the conservative retail approach? 34. What…
Metlock Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory $155,300 Sales revenue $655,700 Purchases for the year 368,400 Sales returns 23.800 Purchase returns 31,200 Rate of gross profit on net sales 30 % Merchandise with a selling price of $21,800 remained undamaged after the fire. Damaged merchandise with an original selling price of $13,500 had a net realizable value of $5.100. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss %24
Pharoah Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory $183,500 Sales revenue $683,600 Purchases for the year 358,400 Sales returns 22,800 Purchase returns 30,000 Rate of gross profit on net sales 30 % Merchandise with a selling price of $23,100 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value of $5,800. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss $
Shamrock Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory $180,800 Sales revenue $662,500 Purchases for the year 361,100 Sales returns 24,600 Purchase returns 27,100 Rate of gross profit on net sales 30 % Merchandise with a selling price of $20,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,500 had a net realizable value of $5,600. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss $ 479,300
Ayayai Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory $ 183,500 Sales revenue $683,600 Purchases for the year 358,400 Sales returns 22,800 Purchase returns 30,000 Rate of gross profit on net sales 30 % Merchandise with a selling price of $ 23,100 remained undamaged after the fire. Damaged merchandise with an original selling price of $ 15,000 had a net realizable value of $ 5,800. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss 2$ eTextbook and Media
Grouper Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. Beginning inventory Purchases for the year Purchase returns Amount of the loss $173,200 $ 424,200 28,000 Sales revenue Sales returns Rate of gross profit on net sales $672,900 24,600 Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $16,100 had a net realizable value of $5,700. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. 30 %
Estimating Inventory Loss Using Gross Profit Method On November 15, a fire destroyed Youngstown Inc.'s warehouse where inventory is stored. It is estimated that $12,000 can be realized from sale of usable but damaged inventory. The accounting records concerning inventory reveal the following. Gross profit averaged 35% of net sales. Inventory at Nov. 1 Purchases from Nov. 1 to Nov. 15 Net sales from Nov. 1 to Nov. 15 $144,000 168,000 240,000 Required a. Calculate the estimated loss of inventory using the gross profit method. $ 144,000 b. Assume instead that the markup is 25% of cost. Estimate the loss of inventory using the gross profit method. $ 120,000 X

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