STANISLAW CORPORATION TRIAL BALANCE MARCH 31, 2015 Cash $29,000 Accounts receiva
ID: 2416793 • Letter: S
Question
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
Year Ended
December 31
2014
2013
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.
1. The fiscal year of the corporation ends on December 31. 2. An examination of the April bank statement and canceled checks revealed that checks written during the period April 1–15 totaled $18,400: $6,410 paid to accounts payable as of March 31, $3,560 for April merchandise shipments, and $4,750 paid for other expenses. Deposits during the same period amounted to $13,600, which consisted of receipts on account from customers with the exception of a $880 refund from a vendor for merchandise returned in April. 3. Correspondence with suppliers revealed unrecorded obligations at April 15 of $23,100 for April merchandise shipments, including $2,980 for shipments in transit (f.o.b. shipping point) on that date. 4. Customers acknowledged indebtedness of $55,600 at April 15, 2015. It was also estimated that customers owed another $8,490 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $730 will probably be uncollectible. 5. The companies insuring the inventory agreed that the corporation’s fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation’s audited financial statements disclosed this information:
Year Ended
December 31
2014
2013
Net sales $533,100 $384,800 Net purchases 283,000 242,300 Beginning inventory 59,400 69,300 Ending inventory 77,500 59,400 6. Inventory with a cost of $7,560 was salvaged and sold for $3,850. The balance of the inventory was a total loss.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.)
Inventory fire loss
$
Explanation / Answer
Inventory Loss
Cost of goods available for sale = Opening inventory + Purchases = 77500+61200 = 138700
Sales = 139300
Gross Profit = 139300 *42% = 58506
Estimated Ending inventory = 139300 +58506 - 138700 = 59106
Inventory Loss = Estimated inventory - Salvage Value = 59106 - 3850 = 55256
2014 2013 Sales 533100 384800 Add: closing inventory 77500 59400 (A) 610600 444200 Purchases 283000 242300 Add: opening inventory 59400 69300 (B) 342400 311600 Gross Profit (A - B) 268200 132600 Gross Profit Margin 50 34 average gross profit rate 42Related Questions
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