Zidek Corp. requires an estimate of the cost of goods lost by fire on March 9. M
ID: 2441799 • Letter: Z
Question
Zidek Corp. requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $92,000; freight-in, $3,400; purchase returns and allowances, $2,400. Sales are made at 33?% above cost and totaled $120,000 to March 9. Goods costing $10,900 were left undamaged by the fire; remaining goods were destroyed.(b) Compute the cost of goods destroyed, assuming that the gross profit is 33?% of sales. (Do not round cost of goods sold percentage.)
Explanation / Answer
(b) Compute the cost of goods destroyed, assuming that the gross profit is 33?% of sales. (Do not round cost of goods sold percentage.)
I assume gross profit 33-1/3% in place of ? mark.
Begining Inventory on January 1 $38,000
Add : Purchases since Jan. 1 $92,000
Add : Freight-In $ 3,400
Less : Returns & Allwances -$ 2,400
Goods available for sale $131,000
Less : Cost of goods sold
($120,000 x 2/3) - $80,000
Less : Undamaged Inventory - $10,900
Goods destroyed by fire $40,100
==========
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.