Wineview Company lost most of its inventory in a fire in December just before the year-end physical
Question:
Beginning inventory ........ $210,000
Purchases for the year ........ 805,000
Purchase returns ........... 15,000
Sales .............. $970,000
Sales returns ........... 71,000
Rate of gross margin on net sales ... 20%
Merchandise with a selling price of $51,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $25,000 had a net realizable value of $2,500.
Instructions
Compute the amount of the loss as a result of the fire, assuming that the company had no insurance coverage.
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Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
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