OReilly Company lost all of its inventory in a fire on December 26, 2010 The accounting records showed the following gross profit data for November and December OReilly is fully insured for fire losses but must prepare a report for the insurance company Instructions (a) Compute the gross profit rat...

a November Net sales 600000 Cost of goods sold Beginning inventory 32000 Purchases 377000 Less Purch ...

OReilly Company lost all of its inventory in a fire on December 26, 2010. The accounting records

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O’Reilly Company lost all of its inventory in a fire on December 26, 2010. The accounting records showed the following gross profit data for November and December.

December (to 12/26) November Net sales Beginning inventory Purchases Purchase returns and allowances Purchase discounts

O’Reilly is fully insured for fire losses but must prepare a report for the insurance company.

Instructions

(a) Compute the gross profit rate for November.

(b) Using the gross profit rate for November, determine the estimated cost of the inventory lost in the fire.

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Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: Sep 20, 2011 09:01 AM

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OReilly Company lost all of its inventory in a fire on December 26, 2010. The accounting records

Question:

December (to 12/26) November Net sales Beginning inventory Purchases Purchase returns and allowances Purchase discounts $600,000 32,000 377,000 13,300 8,500 8,800 $700,000 424,000 14,900 9,500 9,900 ? Freight-in Ending inventory 36,000

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