Erins Boutique was recently destroyed by fire. For insurance purposes, she must determine the value of the
Question:
Erin’s Boutique was recently destroyed by fire. For insurance purposes, she must determine the value of the destroyed inventory. She knows the following information about her 2012 operations before the fire occurred:
Beginning inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,500
Net purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Profit margin . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35%
Estimate the cost of Erin’s destroyed inventory.
Step by Step Answer:
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain