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

Question

Morgan Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $34,800. Purchases since January 1 were $75,700 freight-in, $3,600; purchase returns and allowances, $2,400. Sales are made at 33 1/3% above cost and totaled $100,100 to March 9, Goods costing $9,800 were left undamaged by the fire; remaining goods were destroyed. (a) Your answer is incorrect. Try again. 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 34833 LINK TO TEXT Attempts: 2 of 2 used (b) Your answer is incorrect. Try again Compute the cost of goods destroyed, assuming that the gross profit is 33 1 3% of sales. (R undrat os for computational purposes to S deci na Places, eg. 78.72345% and final answer to 0 decimal places, eg. 28,987.) .. "? Cost of goods destroyed s

Explanation / Answer

(a)

(b)

Opening balance on Jan. 1 $34,800 Add: Purchase 75,700 Add: Freight 3,600 Less: Purchase Return (2,400) Less: Undamaged goods (9,800) Less: Cost of goods sold ($100,100 / 1.3333) (75,077) Cost of goods destroyed $26,823

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