Exercise 9-18 Novak Lumber Company handles three principal lines of merchandise
ID: 2440671 • Letter: E
Question
Exercise 9-18 Novak Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost. 25% 30% 40% Millwork Hardware and fittings On August 18, a fire destroved the office, lumber shed, and a consider 1 able portion of the lumber stacked in the yard. To Sle a report of loss for insurance purposes, the company must know what the inventories were immediately preceding the fire. No detail or perpetual which was kept in a fireproof vault and thus escaped destruction. inventory records of any kind were maintained. The only pertinent information you are able to obtain are the following facts frem the general ledge kind were maintained. The Lumber Millwork Hardware $44,200 Inventory, Jan. 1, 2017 Purchases to Aug 18, 2017 1,493,800 369,300 158,100 Sales to Aug. 18, 2017 249,100 $89,700 2,085,100 514,800 200,200 submit your estimate of the inventory an ounts innnediately prece ng the fire.(Round ratios fer computational purposes to 5 decimal places, eg. 28,987.) 0 7.74 265% and final answers to 0 decimal places Lumber Millwork Hardware inventory sExplanation / Answer
Answers
Working
Lumber
Millwork
Hardware
A
Sales
$ 2,085,100.00
$ 514,800.00
$ 200,200.00
B
Gross Profit % on cost
25%
30%
40%
C = 100% + B
Sales as % of cost = 100% cost + GP %
125%
130%
140%
D = A/C
Amount of cost of Goods Sold
$ 1,668,080.00
$ 396,000.00
$ 143,000.00
Hence, Ending Inventory = Beginning balance + Purchases – Cost of Goods Sold.
Working
Lumber
Millwork
Hardware
A
Beginning Inventory (Jan 1, 2017)
$ 249,100.00
$ 89,700.00
$ 44,200.00
B
Purchases till Aug 18, 2017
$ 1,493,800.00
$ 369,300.00
$ 158,100.00
C [Calculated above]
Cost of Goods Sold till Aug 18, 2017
$ 1,668,080.00
$ 396,000.00
$ 143,000.00
D = (A+B) - C
Amount of Ending Inventory on Aug 18, 2017
$ 74,820.00
$ 63,000.00
$ 59,300.00
Working
Lumber
Millwork
Hardware
A
Sales
$ 2,085,100.00
$ 514,800.00
$ 200,200.00
B
Gross Profit % on cost
25%
30%
40%
C = 100% + B
Sales as % of cost = 100% cost + GP %
125%
130%
140%
D = A/C
Amount of cost of Goods Sold
$ 1,668,080.00
$ 396,000.00
$ 143,000.00
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