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

Question

Exercise 9-15 Adams Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,200. Purchases since January 1 were $76,900; freight-in, $3,700; purchase returns and allowances, $2,700. Sales are made at 33 1/3% above cost and totaled $106,100 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, e.g. 15% or 125') Cost of goods destroyed s LINK TO TEXT Compute the cost of goods destroyed assuming that the gross profit is 33 3% of sales. Roundratios for computational Purposes to 5 decima places, e9-78 2 s and fina answer to 0 decimal places, e.g. 28,987.) Cost of goods destroyed s Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

a) Beginning Inventory on Jan. 1      38,200.00 Add: Purchases since Jan. 1      76,900.00 Add: Freight-In        3,700.00 Less: Return & Allowances      (2,700.00) Goods available for sale (a)    116,100.00 Sales are made at 33 1/3% above cost in terms of sale = 33.333/(100+33.333) =25% sales    106,100.00 Less: Profit @ 25%    (26,525.00) Cost of goods sold (b)      79,575.00 Ending inventory (a-b)      36,525.00 Less: Undamaged Inventory    (10,400.00) Good destroyed      26,125.00 b) Beginning Inventory on Jan. 1      38,200.00 Add: Purchases since Jan. 1      76,900.00 Add: Freight-In        3,700.00 Less: Return & Allowances      (2,700.00) Goods available for sale    116,100.00 Less: Cost of good sold(106100*2/3)    (70,733.33) Ending inventory      45,366.67 Less: Undamaged Inventory    (10,400.00) Good destroyed      34,966.67

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