Exercise 9-15 (Part Level Submission) Henry Legler requires an estimate of the c

Question

Exercise 9-15 (Part Level Submission) Henry Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $34,600. Purchases since January 1 were 71,200; freight in $3,600; purchase returns and allowances, $2,700 Sales are made at 33 L/3%above c stand tota e sus apoto latch 9 Goods costing $11,400 were left undamaged by the fire; remaining goods were destroyed (b) Compute the cost of goods destroyed, assuming that the gross profit is 33 1/3% of sales. (Round ratios for computational purposes to 5 decimal places, eg. 78.7234596 and final answer to 0 decimal places, eg. 28,987.) Cost of goods destroyed , Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

b) Compute cost of goods destroyed assuming thaat the gross profit is 33.33% of sales :

Beginning inventory 34600 Add: Purchase 71200 Add : Freight in 3600 Less:purchase return and allowances (2700) Cost of goods available for sale 106700 Less: Cost of goods sold (105300*66.67%) (70200) Ending inventory at the time of fire 36500 Less : Undamanged by fire (11400) Cost of goods destroyed 25100

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