Your client, Miguel Trading Corporation, requests your assistance in determining the amount of loss and in filing an insurance claim in connection with a fire on June 15, 2022 that destroyed some of the company's inventory and accounting records.

You were able to obtain the following information available records:
1. The last physical inventory was taken on December 31, 2021. At that time, total inventory (at cost) amounted to P210,789.80.
2. The annual premium of P1,440 on the insurance carries was due and paid on April 1, 2022. The policy, which has a face amount of P155,000 carries an 80% coinsurance clause.
3. Accounts payable were P110,106.41 on December 31, 2021 and P126,945.37 at the time the fire occurred.
4. Payments to vendors from December 31, 2021 to the date of the fire totaled P641,871.56.
5. All sales are on account and accounts receivable were P135,009.18 at December 31, 2021 and P107,145.25 at the date of the fire.
6. Collections on receivables from December 31, 2021 to the date of the fire amounted to P876,195.50.
7. Almost all the merchandise items are sold at approximately 30% in excess of cost. As at June 15, 2022, the total cost of inventory items not destroyed by the fire amounted to P144,882.33.

Required:
1. Compute the amount of inventory (at cost) as at June 15, 2022?

2. Compute the amount of recovery due from the insurance company?

3. Compute the amount of loss incurred by Miguel as a result of the fire?

Answer rating: 100% (QA)

1 Compute the amount of inventory at cost as ... View the full answer