On November 15, a fire destroyed Youngstown Inc.'s warehouse where inventory is stored. It is estimated that
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Question:
On November 15, a fire destroyed Youngstown Inc.'s warehouse where inventory is stored. It is estimated that $12,000 can be realized from sale of usable but damaged inventory. The accounting records concerning inventory reveal the following. Gross profit averaged 35% of net sales.
Inventory at Nov. 1 | $144,000 |
Purchases from Nov. 1 to Nov. 15 | 168,000 |
Net sales from Nov. 1 to Nov. 15 | 240,000 |
Required a. Calculate the estimated loss of inventory using the gross profit method. $Answer b. Assume instead that the markup is 25% of cost. Estimate the loss of inventory using the gross profit method. $Answer
Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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