Ayayai Company lost most of its inventory in a fire in December just before the year-end...

 

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Ayayai 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 $177,000 Sales revenue $646,500 Purchases for the year 358,900 Sales returns 25,200 Purchase returns 29,300 Rate of gross profit on net sales 30 % Merchandise with a selling price of $21,700 remained undamaged after the fire. Damaged merchandise with an original selling price of $14,500 had a net realizable value of $5,400. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Ayayai 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 $177,000 Sales revenue $646,500 Purchases for the year 358,900 Sales returns 25,200 Purchase returns 29,300 Rate of gross profit on net sales 30 % Merchandise with a selling price of $21,700 remained undamaged after the fire. Damaged merchandise with an original selling price of $14,500 had a net realizable value of $5,400. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.

Answer rating: 100% (QA)

To compute the amount of the loss as a result of the fire we need to determine the cost of the inven... View the full answer