Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 5, Problem 22QS
Confucious Bookstore’s inventory is destroyed by a fire on September 5. The following data for the current year are available from the accounting records. Estimate the cost of the inventory destroyed.
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On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $305,000; purchases and net sales from the beginning of the year through February 26, $570,000 and $770,000, respectively; gross profit ratio, 25%.Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $220,000; purchases and net sales from the beginning of the year through February 26, $400,000 and $600,000, respectively; gross profit ratio, 30%. Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockport Corporation. The following
information is available from the records of the company's periodic inventory system: beginning inventory, $315,000; purchases and
net sales from the beginning of the year through February 26, $590,000 and $790,000, respectively; gross profit ratio, 35%.
Estimate the cost of the inventory destroyed by the hurricane using the gross profit method.
Beginning inventory
Plus: Net purchases
Cost of goods available for sale
Less: Cost of goods sold:
Net sales
Less: Estimated gross profit
Estimated cost of goods sold
Estimated cost of inventory destroyed
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Chapter 5 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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