Estimation of Fire Loss On September 28, 2013, a fire destroyed the entire merch

Question

Estimation of Fire Loss

On September 28, 2013, a fire destroyed the entire merchandise inventory of Carroll Corporation. The following information is available:

Required:

What is the estimated inventory on September 28, 2013, immediately prior to the fire?

CARROLL CORPORATION

Calculation of estimated inventory on

September 28, 2013 (prior to the fire)

$150,000

$555,000

$?

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What is the estimated inventory on September 28, 2013, immediately prior to the fire?

CARROLL CORPORATION

Calculation of estimated inventory on

September 28, 2013 (prior to the fire)

Beginning inventory

$150,000

Purchases on hand 405,000 Cost of good sold available for sale

$555,000

Less: cost of good sold ? Inventory on hand september

$?

Explanation / Answer

Statement showing computations Particulars Amount Opening inventory                   150,000.00 Purchases exclusing Transit = 465,000 - 60,000                   405,000.00 Total Available inventory                   555,000.00 Sales at Costs                     450,000.00 Ending Inventory                   105,000.00 Sales                   540,000.00 Markup = 20% of Cost Cost +.2 Cost = 540000 1.2 Cost = 540,000 Cost= 450,000

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