Zabinski Co. paid $150,000 for a purchase that included land, building, and office furniture. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Land, $20,000, Building, $150,000, and Office furniture, $30,000. Based on this information the cost that would be allocated to the land is: a. $17,500 b. $20,000 c. $25,000 d. $15,000 On January 1, ABC Co. Department Store had an inventory of $60,000. January purchases were $70,000 and January sales were $100,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 20% of sales. Merchandise with a cost of $6,000 remained undamaged after the fire. Assume the store had no insurance coverage. Required: a. Using the gross profit method, compute the estimated ending inventory. b. Compute the estimated fire loss
Zabinski Co. paid $150,000 for a purchase that included land, building, and office furniture. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Land, $20,000, Building, $150,000, and Office furniture, $30,000. Based on this information the cost that would be allocated to the land is: a. $17,500 b. $20,000 c. $25,000 d. $15,000 On January 1, ABC Co. Department Store had an inventory of $60,000. January purchases were $70,000 and January sales were $100,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 20% of sales. Merchandise with a cost of $6,000 remained undamaged after the fire. Assume the store had no insurance coverage. Required: a. Using the gross profit method, compute the estimated ending inventory. b. Compute the estimated fire loss
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zabinski Co. paid $150,000 for a purchase that included land, building, and office
furniture. An appraiser provided the following estimates of the market values of the
assets if they had been purchased separately: Land, $20,000, Building, $150,000, and
Office furniture, $30,000. Based on this information the cost that would be allocated
to the land is:
a. $17,500
b. $20,000
c. $25,000
d. $15,000
On January 1, ABC Co. Department Store had an inventory of $60,000. January
purchases were $70,000 and January sales were $100,000. On February 1 a fire
destroyed most of the inventory. The rate of gross profit was 20% of sales.
Merchandise with a cost of $6,000 remained undamaged after the fire. Assume the
store had no insurance coverage.
Required:
a. Using the gross profit method, compute the estimated ending inventory.
b. Compute the estimated fire loss
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