Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…
A: Given, Gp ratio = 40% = 100 * Gross profit / Net sales Purchase = 420000 Net sales = 620000…
Q: 7.On March 31, 2021, the warehouse of Cucumber Company was destroyed by fire. The company's markup…
A: Cost of inventory is the total cost incurred to bring the inventory to its present condition. This…
Q: On February 26 a hurricane destroyed the entire inventory stored in a warehouse owned by the…
A: Cost of inventory destroyed can be found out by applying the gross profit ratio on sale and finding…
Q: On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse…
A: Cost of goods available for sale = Beginning inventory + net purchases
Q: Wallace Company lost most of its inventory in a fire in December just before the year-end physical…
A: Net Purchases = Purchases for the year - Purchase returns = $390,000 - $30,000 = $330,000 Net sales…
Q: 12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost most of its…
A: Cost of goods sold means the cost of goods which has been sold out and exclude the cost of ending…
Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…
A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases…
Q: Metlock Company lost most of its inventory in a fire in December just before the year-end physical…
A: Formula: Amount of loss = Ending inventory - Undamaged inventory - Net realizable value of damaged…
Q: A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that…
A: Cost of Goods sold = Sales - Gross profit =$8,200,000-8,200,000*20% = $6,560,000
Q: Over the past 3 years, the gross profit rate for Jini Company was 30%. Last week a fire destroyed…
A: Inventory destroyed = Beginning inventory + Net purchases - Cost of goods sold Cost of goods sold =…
Q: 5. On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints.…
A: Raw materials: It is the basic input required to manufacture the finished products. The raw…
Q: The ABC Company had its entire inventory destroyed when a fire swept through the company's…
A: Inventory valuation is a technique that is used by companies to find out the value of the ending…
Q: 12. Ebasan was organized on January 1, 2020. On December 31, 2021, the corporation lost a warehouse…
A: Inventory means the amount of stock which is held for used in production or for resale purpose.…
Q: Muller Computers stores its inventory in a warehouse that burned to the ground in late November,…
A: Cost of goods sold = Sales - Gross profit where, Gross profit = Sales x Gross profit rate
Q: Howard's Supply Co. suffered a fire loss on April 20, 2021. The company's last physical inventory…
A: Inventory is considered as current assets of the company. It is considered as most valuable asset as…
Q: A fire on 28th Feb destroyed some of a company’s inventory and its inventory records. The following…
A: Inventory is the value of goods manufactured, purchased or traded by the company.
Q: Merkley Manufacturing began operations five years ago. On August 13, 2017, a fire broke out in the…
A: Previous years sales : 2014 2015…
Q: The home office consistently bills its branch for shipments at 120% of cost. On September 21, 2021,…
A: Whenever head office sells goods to its branch it will add certain markup on cost price. Such markup…
Q: A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that…
A: Gross Profit Method: Under this method, the beginning inventory is added to the net purchases…
Q: On September 22, 2016, a flood destroyed the entire merchandise inventory on hand in a warehouse…
A: Gross profit method:
Q: A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the…
A: Inventory means the stock of goods in which the businessmen deals. Cost of goods sold means the…
Q: On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the…
A: The gross profit approach is a method of determining the volume of finishing inventory in a given…
Q: All goods were completely destroyed except for partially damaged goods that normally sell for…
A: Calculation of Closing Inventory: Particulars Amount(P) Opening Inventory, January 1 P1,320,000…
Q: On June 29, 20x1, a fire damaged the warehouse and factory of an entity completely destroying the…
A: When sometimes inventory is being destroyed by fire or any other natural calamity, then inventory…
Q: Blazing Red Company began operations in 2016. On August 28 inventory and most of the accounting…
A: Based on the facts given in the above problem we will plot the data into the profit and loss…
Q: A fire destroys all of the merchandise of Assante Company on February 10, 2020. Presented below is…
A: Closing stock = Cost of goods available for sale - Cost of goods sold First we need to calculate…
Q: Wallace Company lost most of its inventory in a fire in December just before the year-end physical…
A: Loss: It is an excess of expenses over firm revenue from single or multiple transactions that arise…
Q: On June 19, 20X0, a fire destroyed the entire uninsured merchandise inventory of the ABC…
A: Sales revenue is calculated as sum of cost of inventory and mark up value. Net sales is calculated…
Q: The inventory of Marshall's Merchandise Company was destroyed by fire on June 1. From an ex-…
A: Income statement: This statement shows the income earned and loss incurred by the organization in…
Q: On September 28, 2019, a fire destroyed the entire merchandise inventory of the Alfonso Corporation.…
A: Cost of goods sold = Sales / (1 + Markup) = P540,000 / (1+0.20) = P450,000
Q: A company's inventory was destroyed in a fire on January 28, 2020. The company's December 31, 2019…
A: Cost of goods sold = Sales - Gross profit where, Gross profit = Sales x Gross profit rate
Q: A fire completely destroyed all the inventory of Glisan Lumber Yard on August 5, 20- -. Fortunately,…
A: Gross profit = sales * gross profit percentage
Q: A fire destroys all of the merchandise -4 of A Company on January , 2020. Presented Below is…
A: Inventory refers to the value of the stock which is computed on the basis of the number of goods and…
Q: . Nectarine Company lost most of its inventory in a fire in December, 2021, just before the year-…
A: The question is related to calculation of loss as a result of fire. We will first calculate the…
Q: On June 30, a fire destroyed Intense Company's entire inventory. The inventory on January 1 totaled…
A: Cost of goods sold = P7800000 × 70% = P5460000
Q: The Star Company's inventory was partially destroyed on July 4, 2004, when its warehouse caught on…
A: The entity saved an inventory of $ 8500, which means the remaining inventory is destroyed by fire.…
Q: A fire in July, just before the year-end physical inventory, destroyed the majority of GH…
A: Cost of goods sold means cost incurred for the purpose of sales of goods. Gross profit is the sales…
Q: On May 31, 2019, a fire completely destroyed the work-in-process inventory of Adler Paints. Physical…
A: Raw materials: It is the basic input required to manufacture the finished products. The raw…
Q: On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store.…
A: Gross Profit on Sales= 25% ÷ (100% + 25%) = 20%Ending Inventory= Beginning inventory + Net purchases…
Q: On August 31, a flood at Lordgin Company's only warehouse caused severe damage to its entire…
A: Solution: Gross profit for 8 months = Net sales * 25% = P5,200,000 * 25% = P1,300,000
Q: Over the past 3 years, the gross profit rate for Jini Company was 42%. Last week a fire destroyed…
A: Beginning inventory = $ 6350 Net purchases = $ 64700 Net sales at retail = $ 49700 Gross profit…
Q: California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1,…
A: COGS % = 1 - Gross profit% Cost of goods available for sale = Beginning inventory + purchases Ending…
Q: . Northstar Sales Corp. was organized on January 1, 2001. On December 31, 2002, the company lost…
A: In this case to compute the loss inventory due to fire by using the gross profit method. To…
Step by step
Solved in 2 steps
- What did i do wrong in my calculations? On November 21, 2021, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $18,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1 $ 130,000 Net purchases from November 1, to the date of the fire 146,000 Net sales from November 1, to the date of the fire 226,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 30% of net sales. Required:Calculate the estimated loss on the inventory from the fire, using the gross profit method. $134,200On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $22,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $150,000 150,000 230,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. ✓ Answer is complete but not entirely correct. Estimated loss from fire $ 153,200 ×On November 21, 2024, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $15,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1, 2024 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales. $ 115,000 143,000 223,000 Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. Estimated loss from fire
- 1. On October 21, 2020, a fire destroyed the entire uninsured merchandise inventory of the Renan Merchandising Company. The following data are available: Inventory, January 1 P80,000; Markup percentage on cost 25%; Purchases, January 1 through October 21 P560,000; Sales, January 1 through October 21 P776,000.What is the approximate inventory loss as a result of the fire? choices: P19,200 P34,000 P58,000 P27,200 2. Daniel Company prepares monthly income statements. A physical inventory is taken only at year-end; hence, month-end inventories must be estimated. All sales are made on account. The rate of markup on cost is 50 percent. The following information relates to the month of August: Accounts receivable, August 1 P20,000; Accounts receivable, August 31 P30,000Collection of accounts receivable during August P50,000; Inventory, August 1 P36,000; Purchases of inventory during August P32,000. The estimated cost of the May 31 inventory is…Wormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available: Sales, January 1 through April 15 $573000 Inventory, January 1 91000 Purchases, January 1 through April 15 477500 20% Markup on cost The amount of the inventory loss is estimated to be • $91000. O $109200. O $95500. O $45500.
- On December 31, 2020, a fire broke out in the warehouse of Problem 13-12 (IAA) Regatta Company destroying all inventory. The following de are available for the current year: January 1 December 31 500,000 480,000 400,000 Inventory Accounts receivable Accounts payable Collection on accounts receivable Payments to suppliers Goods out on consignment at sales price Salvage value of inventory 440,000 500,000 2,640,000 1,600,000 200,000 20,000 2019 2018 2017 2,800,000 1,260,000 2,700,000 1,080,000 2,500,000 860,000 Sales Gross profit 1. What is the amount of purchases for the current year? a. 1,700,000 b. 1,600,000 c. 1,500,000 d. 2,100,000 2. What is the amount of sales for the current year? a. 2,600,000 b. 2,680,000 c. 2,640,000 d. 2,200,000 3. What is the inventory fire loss on December 31, 2020? a. 600,000 b. 420,000 c. 508,000 d. 500,000 374Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Ker Fruit Toppings Fruit Marshmallow Chocolate Toppings Toppings Toppings $ 29,000 $ 7,900 $ 3,900 195,000 Marshmallow Chocolate 245,000 15% Estimated cost of lost inventory 45,000 64,000 25% 1. Calculate the estimated cost of each of the toppings lost in the fire. 12,900 20,900 30%A substantlal portlon of Inventory owned by Prentiss Sporting Goods was recently destroyed when the roof collapsed during a ralnstorm. Prentiss also lost some of Its accounting records. Prentiss must estimate the loss from the storm for Insurance reporting and financial statement purposes. Prentiss uses the perlodic Inventory system. The following accounting information was recovered from the damaged records. Beginning inventory $196, eee 398, e00 Purchases to date of storm Sales to date of storm бее, вее The value of undamaged Inventory counted was $102,676. Hıstorically, Prentiss' gross margin percentage has been approximately 22 percent of sales. Required Estimate the following: a. Gross margin in dollars. b. Cost of goods sold in dollars. c. Ending Inventory. d. Amount of lost Inventory. a. Gross margin b. Cost of goods sold C. Estimated ending inventory d. Inventory lost
- On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: January 1 December 31 Inventory Accounts Receivable Accounts Payable Collection on accounts P 750,000 510,000 350,000 P 490,000 590,000 3,100,000 receivable Payment to suppliers Goods out on consignment at sales price Salvage value of inventory 1,950,000 310,000 45,000 2019 P3,000,000 1,200,000 2018 2017 Sales Gross Profit P2,750,000 P2,100,000 1,045,000 756,000 Requirements: Compute the following on December 31, 2020 1. Purchases 2. Sales 3. Inventory LossOn December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: January 1 December 31Inventory P 750,000Accounts Receivable 510,000 P 490,000Accounts Payable 350,000 590,000Collection on accounts receivable 3,100,000Payment to suppliers 1,950,000Goods out on consignment at sales price 310,000Salvage value of inventory 45,0002019 2018 2017Sales P3,000,000 P2,750,000 P2,100,000Gross Profit 1,200,000 1,045,000 756,000Requirements: Compute the following on December 31, 20201. Purchases2. Sales3. Inventory LossE6.18 modified The inventory of Ipswich Books was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first two months of the year are obtained: Sales revenue $51,000, Sales returns and allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase returns and allowances $1,800. Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 40% on net sales. b. A beginning inventory of $30,000 and gross profit rate of 25% on cost