Leon Legler requires an estimate of the cost of goods lost by fire on March 9. M

Question

Leon Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $41,400. Purchases since January 1 were $66,900; freight-in, $3,400; purchase returns and allowances, $2,600. Sales are made at 33 1/3% above cost and totaled $101,300 to March 9, Goods costing $10,400 were left undamaged by the fire; remaining goods were destroyed. Compute the cost of goods destroyed. (Round gross profit percentage and final answer to 0 decimal places, eg, 15% 125.) Cost of goods destroyed LINK TO TEXT 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, e.g. 78.72345% and final answer to 0 decimal places, e.g. 28,987. Cost of goods destroyed

Explanation / Answer

Beginning inventory 41400 Add: Purchases 66900 Add Freight in 3400 Less: Purchase return -2600 Total cost of goods available 109100 Less: Cost of goods sold 75975 =101300/133.33% Less: Goods left undamaged 10400 Cost of goods destroyed 22725 2 Beginning inventory 41400 Add: Purchases 66900 Add Freight in 3400 Less: Purchase return -2600 Total cost of goods available 109100 Less: Cost of goods sold 67533 =101300*(1-33.33333%) Less: Goods left undamaged 10400 Cost of goods destroyed 31167

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