On February 17, 2007 a flood destroyed the work in process inventory and half the raw materials
Question:
On February 17, 2007 a flood destroyed the work in process inventory and half the raw materials inventory of the LRT Company. There was no damage to the finished goods inventory. A physical inventory taken after the flood indicated the following values:
Raw materials $35,000 Finished goods $79,000
A review of the accounting records indicated the following:
Inventories, December 31, 2006
Required
Compute the value of the inventory destroyed by theflood.
Transcribed Image Text:
Raw materials Work in process Finished goods $70,000 80,000 72,000 50,000 Raw materials purchases Direct labor cost Manufacturing overhead cost Gross profit rate (on sales) $20,000 30,000 15,000 40% Sales (to February 17)
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LRT COMPANY Computation of Value of Inventory Lost February 17 2007 Sales 50000 Less Gross profit 40 ...View the full answer
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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