Gross Profit Method Castlevania Company lost most of its inventory in a fire in December just before
Question:
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
Purchases for the year..............................450,000
Purchase returns.........................................30,000
Sales..........................................................$650,000
Sales returns................................................24,000
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 of $5,300.Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Beginning inventory Purchases Purchase returns Goods available at cost Sales Sa...View the full answer
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
