mispola
Feb 17, 2012, 08:42 PM
(Gross Profit Method)
Castlevania Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following.
Beginning inventory $170,000 Sales
$650,000
Purchases for the year 450,000 Sales returns 24,000
Purchase returns 30,000 Rate of gross margin on net sales 30%
Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value (after the fire) of $5,300.
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
Fire loss on inventory $ ?
Castlevania Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following.
Beginning inventory $170,000 Sales
$650,000
Purchases for the year 450,000 Sales returns 24,000
Purchase returns 30,000 Rate of gross margin on net sales 30%
Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value (after the fire) of $5,300.
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
Fire loss on inventory $ ?