QS 5-26B (Algo) Estimating inventories-gross profit method LO P4Confucius Bookstore's inventory is destroyed by a fire on September 5. The following data for the current year are available from theaccounting records.Beginning inventory, January 1January 1 through September 5 purchases (net)January 1 through September 5 sales (net)Current year's estimated gross profit rateEstimate the cost of the inventory destroyed.Beginning inventoryEstimated September 5 inventory destroyed$$170,000170,000$ 170,000$360,000$ 720,00042%

Businesses incur losses as a result of damaged inventory. It could be brought on by human…

Answered: Confucius Bookstore's inventory is…

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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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
PROBLEM 23: The records of Santiago were destroyed by fire at the end of the current year. However, certain statistical data related to the income statement are available: Interest expense P 20,000 Cost of goods sold 2,000,000 Sales discount 100,000 The beginning inventory was P400,000 and decreased 20% during the year. Administrative expenses are 25% of cost of goods sold but only 10% of gross sales. Four fifths of the operating expenses relate to sale activities. 29. Ignoring income tax, what is the net income for the current year?
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On 30 September 20X1 part of the inventory of a company was completely destroyed by fire. The following information is available: Inventory at 1 September 20X1 at cost $49,800 Purchases for September 20X1 $88,600 Sales for September 20X1 $130,000 Inventory at 30 September 20X1 – undamaged items $32,000 Standard gross profit percentage on sales 30% Based on this information, what is the cost of the inventory destroyed?
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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-- $45,000 Net purchases, January 1, through March 15, 20-- 252,000 Net sales, January 1, through March 15, 20-- 378,000 Normal 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 66,350 x Feedback 2. 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-- 22,275 x Feedback
A hurricane destroyed the inventory and store of a Company. The followinginformation is available:Beginning Inventory $100,000Purchases $400,000Net Sales Revenue $600,000Gross Profit Percentage 20%Compute the amount of inventory lost in the hurricane.
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33.The following data were available for ABC Corp at Nov 7, 20X2:Net purchases ( Jan 1-Nov 7) P75,000Inventory, Jan1 P4,000Gross Sales, P115,000Sales discount, P7,000Gross profit is 50% of costA fire destroyed the warehouse on Nov 7, 20X2 and destroyed 75% of the ending inventory.How much was the loss on fire at Nov. 7, 20x2? 16,125 5,375 5,250 1,750
7. The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records:
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3. Northstar Sales Corp. was organized on January 1, 2001. On December 31, 2002, the company lost most of its inventory in a warehouse fire just before the year-end count of inventory was to take place. Data from the records disclosed the following: 2001 2002 Inventory, January 1 P 0 P173,120 Purchases during year 860,000 692,000 Purchase returns and allowances during year 46,120 64,600 Sales during year 788,000 836,000 On January, 2002, Northstar's pricing policy was changed so that the gross profit rate ( based on sales ) would be 3 percentage points higher than the one earned in 2001. Salvaged undamaged merchandise was marked to sell at P24,000, while damaged merchandise marked…

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