Exercise 9-18 Culver Lumber Company handles three principal lines of merchandise
ID: 2543772 • Letter: E
Question
Exercise 9-18
Culver Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost.
On August 18, a fire destroyed the office, lumber shed, and a considerable portion of the lumber stacked in the yard. To file a report of loss for insurance purposes, the company must know what the inventories were immediately preceding the fire. No detail or perpetual inventory records of any kind were maintained. The only pertinent information you are able to obtain are the following facts from the general ledger, which was kept in a fireproof vault and thus escaped destruction.
Lumber
Millwork
Hardware
Submit your estimate of the inventory amounts immediately preceding the fire. (Round ratios for computational purposes to 5 decimal places, e.g. 78.74265% and final answers to 0 decimal places, e.g. 28,987.)
Lumber
Millwork
Hardware
Open Show Work
Lumber 25% Millwork 30% Hardware and fittings 40%Explanation / Answer
Lumber Millwork Hardware Gross profit ratio on sales 20.00000% 23.07692% 28.57143% Inventory, Jan. 1, 2017 246600 91300 44100 Add: Purchases to Aug. 18, 2017 1479900 378000 162800 Less: Cost of goods sold 1647440 413000 156000 Inventory 79060 56300 50900
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