Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Textbook Question
Chapter 5B, Problem 6PB
Estimate inventory. (LO 9). Carrie’s Cotton Candy Company sells cotton candy to visitors at a traveling county fair. During a drought a fire destroyed the entire inventory in late July. In order to file an insurance claim, Carrie, the owner of the company, must estimate the value of the lost inventory. Records from January 1 through the date of the fire in July indicated that Carrie’s Cotton Candy Company started the year with $4,250 worth of inventory on hand. Purchases for the year amounted to $8,000, and sales up to the date of the fire were $17,500. Gross profit percentage has traditionally been 35%.
Requirements
- 1. How much should Carrie request from the insurance company?
- 2. Suppose that one bag of cotton candy mix was spared by the fire. The cost of that bag was $50. How much was the inventory loss under these conditions?
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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:
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Chapter 5B Solutions
Financial Accounting
Ch. 5B - Suppose Base Company began May with inventory of...Ch. 5B - Estimate inventory. (LO 9). Fantasy Games, Inc.,...Ch. 5B - (Estimate inventory. (LO 9). Knick-Knacks wants to...Ch. 5B - Estimate inventory. (LO 9). The following...Ch. 5B - Estimate inventory. (LO 9). The records of Florida...Ch. 5B - Estimate inventory. (LO 9). Hines Fruit Corp....Ch. 5B - Estimate inventory. (LO 9). Carries Cotton Candy...
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