Your answer is incorrect. Try again. riole Company lost most of its inventory in

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Your answer is incorrect. Try again. riole Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following. $171,400 390,000 Sales revenue Beginning inventory Purchases for the year $695,100 22,800 Sales returns Purchase returns 30,400Rate of gross profit on net sales 30 % Merchandise with a selling price of $18,900 remained undamaged after the fire. Damaged merchandise with an original selling price of $14,100 had a net realizable value of $5,200. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage. Amount of the loss 46000 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Beginning inventory $171,400 Add net Purchases(390,000-$30,400) $359,600 Goods available for sale $531,000 Net Sales at selling price(695,100-22,800) $672,300 Less: gross profit(30%) $201,690 Sales at cost $470,610 Approximate inventory before fire $60,390 Less:Approximate inventory after fire{(18900×70%)+5,200) $18,430 Loss due to fire $41,960

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