All goods were completely destroyed except for partially damaged goods that normally sell for P200,000 and that had an estimated net realizable value of P50,000 and undamaged goods that normally sell for P120,000. Inventory, January 1 P1,320,000 Net purchases, January through August 31 8,480,000 Net sales, January 1 through August 31 11,200,000 The company had the following gross profit rates in the last three years: Gross profit rate 2018 29.0% 2019 26.7% 2020 23.2% 3-year average 25.0% What is the estimated amount of fire loss on September 30, 2021?
All goods were completely destroyed except for partially damaged goods that normally sell for P200,000 and that had an estimated net realizable value of P50,000 and undamaged goods that normally sell for P120,000. Inventory, January 1 P1,320,000 Net purchases, January through August 31 8,480,000 Net sales, January 1 through August 31 11,200,000 The company had the following gross profit rates in the last three years: Gross profit rate 2018 29.0% 2019 26.7% 2020 23.2% 3-year average 25.0% What is the estimated amount of fire loss on September 30, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On the night of August 31, 2021, a flood ravaged and destroyed most of the merchandise inventory of Wiccan Company.
All goods were completely destroyed except for partially damaged goods that normally sell for P200,000 and that had an estimated net realizable value of P50,000 and undamaged goods that normally sell for P120,000.
Inventory, January 1 P1,320,000
Net purchases, January through August 31 8,480,000
Net sales, January 1 through August 31 11,200,000
The company had the following gross profit rates in the last three years:
Gross profit
rate
2018 29.0%
2019 26.7%
2020 23.2%
3-year average
25.0%
- What is the estimated amount of fire loss on September 30, 2021?
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