On April 15, 2015, fire damaged the office and warehouse of Stanislaw Corporatio
ID: 2416134 • Letter: O
Question
On April 15, 2015, fire damaged the office and warehouse of Stanislaw Corporation. The only accounting record saved was the general ledger, from which the trial balance below was prepared.
STANISLAW CORPORATION
TRIAL BALANCE
MARCH 31, 2015
Cash
$29,000
Accounts receivable
44,500
Inventory, December 31, 2014
77,500
Land
39,800
Buildings
111,100
Accumulated depreciation
$43,500
Equipment
3,770
Accounts payable
32,900
Other accrued expenses
15,360
Common stock
101,710
Retained earnings
61,200
Sales revenue
139,300
Purchases
61,200
Miscellaneous expense
27,100
$393,970
$393,970
The following data and information have been gathered.
Year Ended
December 31
2014
2013
Compute the amount of inventory fire loss. (Round ratios for computational purposes to 1 decimal places, e.g 78.5% and final answer to 0 decimal places, e.g. 28,987.)
STANISLAW CORPORATION
TRIAL BALANCE
MARCH 31, 2015
Cash
$29,000
Accounts receivable
44,500
Inventory, December 31, 2014
77,500
Land
39,800
Buildings
111,100
Accumulated depreciation
$43,500
Equipment
3,770
Accounts payable
32,900
Other accrued expenses
15,360
Common stock
101,710
Retained earnings
61,200
Sales revenue
139,300
Purchases
61,200
Miscellaneous expense
27,100
$393,970
$393,970
Explanation / Answer
Stanislaw Corporation Computation of inventory fire loss 15-Apr-11 Inventory 1/1/11 $75,000 Purchase 1 Jan 11 31 March 11 52,000 April merchandise shipment paid 3,400 Unrecorded Purchases on account 15,600 Total 1,46,000 Less:Shipments in transit $2,300 Merchandise returned 950 3,250 Merchandise available for sale 1,42,750 Less: Sales 1/1/11- 31/3/11 1,35,000 Sales 1/4/11 - 15/4/11 Acknowledged Receivables 46,000 Estimated receivables not acknowledged 8,000 Total 54,000 Add: Collecltion 1/4 - 15/4/11 ($12,950-$950) 12,000 Total 66,000 USS: Receivable 3/31/08 40,000 26,000 Total sales 1/1 - 15/4/11 1,61,000 Uss: Gross profit (44%x$1,61,000) 70,840 90,160 Estimated merchandise inventory 70,840 Less: Sale of salvaged inventory 3,500 Inventory fire loss $67,340 Computation of Gross Profit Ratio Net sales (2009) $3,90,000 Net sales (2010) 5, 30,000 Total net sales 9,20,000 Beginning inventory $66,000 Net purchases, 2006 2, 35,000 Net purchases, 2007 2, 80,000 Total 5,81,000 Ending inventory 75,000 5,06,000 Gross Profit $4,14,000 Gross Profit ratio = $4,14,000/$9,20,000=0.45=45%
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