Exercise 9-15 Steve Legler requires an estimate of the cost of goods lost by fir

Question

Exercise 9-15 Steve Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $40,100. Purchases since January 1 were $71,700; freight-in, $3,800; purchase returns and allowances, $2,200. Sales are made at 33 1/3% above cost and totaled $91,600 to March 9 Goods costing $10,700 were left undamaged by the fire; remaining goods were destroyed Your answer is incorrect. Try again. Compute the cost of goods destroyed. (Round gross profit percentage and final answer to 0 decimal places, eg, 15% or 125.) Cost of goods destroyed 79800 LINK TO TEXT Your answer is incorrect. Try again. 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. 78.7234590 and final answer to 0 decimal places, eg. 28,987.) Cost of goods destroyed 32235 LINK TO TEXT

Explanation / Answer

Ans. 1 Computation of marchandise as on march - 9 marchandise at the beginning 40000 Sales 91600 Purchases   - 71700 Marcandise on march-9 44600 Less - Purcase returnes and allowances   - 2200 69500 (balancing figure) Freight 3800 Gross profit(91600*25%) 22900 136200 136200 *Gross profit on cost is 33.33% so on sales it would be 25% Cost of goods destroyed: Marcandise on march-9 44600 Less : Left undamaged 10700 Cost of goods destroyed 33900 Ans.2 Computation of marchandise as on march - 9 marchandise at the beginning 40000 Sales 91600 Purchases   - 71700 Marcandise on march-9 52233.33028 Less - Purcase returnes and allowances   - 2200 69500 (balancing figure) Freight 3800 Gross profit (33.33333% of 91600) 30533.33028 143833.33028 143833.33028 Cost of goods destroyed : Marcandise on march-9 52233.33028 Less : Left undamaged 10700 Cost of goods destroyed 41533.33028 or 41533 So the Cost of goods destroyed would be 41533

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