Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL Inc's warehouse which was full of inventory. The accounting records were stored in another facility and not destroyed in the fire. The company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning inventory P350,500 Purchases through August 30, 2021 470,250 Net sales revenue through August 30, 2021 745,200 The gross profit percent has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1CP
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Transcribed Image Text:Late on the night of August 30, 2021, an arsonist destroyed the FAITHFUL
Inc's warehouse which was full of inventory. The accounting records were
stored in another facility and not destroyed in the fire. The company is in the
process of filing a claim with its insurance company for the inventory loss due
to the fire.
Beginning inventory
P350,500
Purchases through August 30, 2021
470,250
Net sales revenue through August 30, 2021
745,200
The gross profit percent has historically been 40% of net sales revenue.
Estimate the value of the inventory destroyed in the fire using the gross
profit method.
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