sibu
Apr 20, 2009, 02:21 AM
Please assist me with the following questions:
Citi-Wholesalers marks its purchases up by 25%. Its inventory was insured against fire, the policy being subject to average.
A fire took place on 30th October 2007 and all inventory was destroyed except for items which had cost $40 000 which were salvaged in good condition.
The following information was obtained from the firm’s ledger:
Inventory (1st March 2007) $ 192 000
Purchases (1st March 2007 to 30th October 2007) $ 728 000
Sales (1st March 2007 to 30th October 2007) $ 960 000
The financial year ends on 28th February 2008.
Required:
4.1 Calculate the cost of inventory destroyed in the fire.
4.2 Calculate the amount to be claimed from the insurance company.
Citi-Wholesalers marks its purchases up by 25%. Its inventory was insured against fire, the policy being subject to average.
A fire took place on 30th October 2007 and all inventory was destroyed except for items which had cost $40 000 which were salvaged in good condition.
The following information was obtained from the firm’s ledger:
Inventory (1st March 2007) $ 192 000
Purchases (1st March 2007 to 30th October 2007) $ 728 000
Sales (1st March 2007 to 30th October 2007) $ 960 000
The financial year ends on 28th February 2008.
Required:
4.1 Calculate the cost of inventory destroyed in the fire.
4.2 Calculate the amount to be claimed from the insurance company.