24) A company\'s warehouse contents were destroyed by a floo d on September 12.

Question

24) A company's warehouse contents were destroyed by a floo d on September 12. The following information was the only information that was salvaged: I. Inventory, beginning: $28,000 2. Purchases for the period: $17,000 3. Sales for the period: $55,000 4. Sales returns for the period: $700 The company's average gross profit ratio is 35%, what is the estimated cost of the lost inventory? 24) A) S44.000. B) S9,705. C)$29,250. D) S25,995. E) $45,000. 26) Jasper Company is a whole merchandise Jasper intends to purchase, and offers a 30% trade discount for large quantity purcha per unit. Jasper's total purchase price per unit will be: 26) saler that buys merchandise in large quantities. Its supplier's catalog indicates a list price of $500 per unit or ses. The cost of shipping for the merchandises S7 A) $507 B) $493 C)$350 D) $343 E) $357

Explanation / Answer

As per Conservative constraint , the accounting information does not overstate income or assets and does not understate expense or liabilities , hence least optimistic method is used in order to be in line with the above statement , that is the estimates of receipts or payments has to be equally likely, that is possible only when the least optimistic amount is used

24) Total cost of inventory (28000+17000) 45000 Less: cost of goods sold (55000*(100%-35%) 35750 Add: cost of sales returns (700*65%) 455 Estimated cost of lost inventory 9705 26) Purchase price per unit (500*(100%-30%) 350 Cost of shipping 7 Purchase price per unit 357 13) 6*120 720 4*120 480 1*125 125 9*125 1125 8*125 1000 2*125 250 11*130 1430 5130 19) option E is correct

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