Daisy's Clothing Ltd. (DCL) recently experienced a flood caused by a faulty sprinkler system that destroyed...

 

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Daisy's Clothing Ltd. (DCL) recently experienced a flood caused by a faulty sprinkler system that destroyed its entire clothing inventory. However, Arnold Spitz, DCL's manager, kept meticulous records about retail prices in the store. DCL's management needs to estimate the value of DCL's ending inventory to support its insurance claim. The following information was taken from the accounting records and from records kept by Arnold up to the date of the flood: Beginning inventory Purchases Purchase returns Additional markups Markdowns Sales Cost Retail $ 15,500 $ 30,000 452,000 902,000 22,000 45,000 12,000 5,000 820,000 Required: Using the retail method of estimating inventory, calculate the amount of the insurance claim for the flood loss. (6 marks) Daisy's Clothing Ltd. (DCL) recently experienced a flood caused by a faulty sprinkler system that destroyed its entire clothing inventory. However, Arnold Spitz, DCL's manager, kept meticulous records about retail prices in the store. DCL's management needs to estimate the value of DCL's ending inventory to support its insurance claim. The following information was taken from the accounting records and from records kept by Arnold up to the date of the flood: Beginning inventory Purchases Purchase returns Additional markups Markdowns Sales Cost Retail $ 15,500 $ 30,000 452,000 902,000 22,000 45,000 12,000 5,000 820,000 Required: Using the retail method of estimating inventory, calculate the amount of the insurance claim for the flood loss. (6 marks)

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