The question is the following:
Thierry Company lost 80% of its inventory in a fire on March 23, 2008. The accounting records showed the following gross profit data for February and March:
February / March (to Mar.23)
Sales $325,000 / $292,500
Sales Returns&Allowances 6,500 / 5,850
Sales Discounts 3,000 / 2,700
Purchases 218,000 / 196,000
Purchase Returns&Allowances 4,360 / 3,920
Purchase Discounts 2,000 / 1,950
Freight In 3,270 / 2,940
Beginning Inventory 17,500 / 25,200
Ending Inventory 25,200 / ?
Thierry is fully insured for fire losses but must prepare a report for the insurance company.
Instructions:
Determine both the estimated total inventory and the inventory lost in the March fire.
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