On April 15, 2015, fire damaged the office and warehouse of Stanislaw Corporatio
ID: 2416826 • 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
$24,900
Accounts receivable
42,800
Inventory, December 31, 2014
83,000
Land
38,700
Buildings
115,000
Accumulated depreciation
$44,100
Equipment
3,800
Accounts payable
27,000
Other accrued expenses
23,870
Common stock
103,030
Retained earnings
59,100
Sales revenue
139,900
Purchases
59,100
Miscellaneous expense
29,700
$397,000
$397,000
The following data and information have been gathered.
Year Ended
December 31
2014
2013
Compute the amount of inventory fire loss
STANISLAW CORPORATION
TRIAL BALANCE
MARCH 31, 2015
Cash
$24,900
Accounts receivable
42,800
Inventory, December 31, 2014
83,000
Land
38,700
Buildings
115,000
Accumulated depreciation
$44,100
Equipment
3,800
Accounts payable
27,000
Other accrued expenses
23,870
Common stock
103,030
Retained earnings
59,100
Sales revenue
139,900
Purchases
59,100
Miscellaneous expense
29,700
$397,000
$397,000
Explanation / Answer
Sale (2 year ) = 537600 + 383100 = $ 920700
Gross Profit (2 year) = Sale - (Beginning inventory of 2013 + Purchase of 2 year - Ending inventory 2014)
Gross Profit for 2 year = 920700 - (69700 + (285000+237700) - 83000) = $ 411300
Gross Profit % = Gross Profit for 2 year /Sale for 2 year
Gross Profit % = 411300/920700 = 44.7%
Amount of inventory fire loss = (Inventory, December 31, 2014 + Purchases till MARCH 31, 2015 - Cost of Good Sold till March 31 + April merchandise shipments paid + merchandise returned + unrecorded obligations for April merchandise shipments - Shipments in transit (f.o.b. shipping point) - Goods sold to customer outstanding - Good sold but will never be collectible - specific Inventory sold)
Amount of inventory fire loss = (83000 + 59100 - 139900*(1-44.7%) + 3790 + 850*(1-44.7%) + 23000- 3040 - 48200*(1-44.7%) - 8700*(1-44.7%) - 7950) = $ 49540
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