On December 19, 2022, a major flood destroyed the merchandise inventory of the Solid Glass...
80.2K
Verified Solution
Link Copied!
Question
Accounting
On December 19, 2022, a major flood destroyed the merchandise inventory of the Solid Glass Door Company. In a waterproof secure safe were the company's records with the following information: Note: The Company's 12 month fiscal year ends December 31 st'. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: a. Correspondence with suppliers revealed unrecorded obligations at December 19 th of $120,734. These unrecorded liabilities pertained to shipments in October totaling $58,365, shipments in November of $50,635, and $10,000 for shipments still in transit on December 19th shipped FOB Destination, and also $1,734 for shipments still in transit FOB Shipping point. b. Customers of the company have acknowledged indebtedness of $94,950 as of December 19th. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $12,650. Finally, based on past experience, it is estimated that 2.25% of accounts receivable will be uncollectible. c. Bank statements and the canceled checks enclosed with the statements for October, November and through December 19th, d. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information nhtained from orior financial statements covering 2021 and 2020: 1. Prepare a schedule to determine the amount of inventory loss from the flood. 2. Do you feel the insurance company's approach is fair? Explain in detail with supporting calculations
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
On December 19, 2022, a major flood destroyed the merchandise inventory of the Solid Glass Door Company. In a waterproof secure safe were the company's records with the following information: Note: The Company's 12 month fiscal year ends December 31 st'. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: a. Correspondence with suppliers revealed unrecorded obligations at December 19 th of $120,734. These unrecorded liabilities pertained to shipments in October totaling $58,365, shipments in November of $50,635, and $10,000 for shipments still in transit on December 19th shipped FOB Destination, and also $1,734 for shipments still in transit FOB Shipping point. b. Customers of the company have acknowledged indebtedness of $94,950 as of December 19th. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $12,650. Finally, based on past experience, it is estimated that 2.25% of accounts receivable will be uncollectible. c. Bank statements and the canceled checks enclosed with the statements for October, November and through December 19th, d. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information nhtained from orior financial statements covering 2021 and 2020: 1. Prepare a schedule to determine the amount of inventory loss from the flood. 2. Do you feel the insurance company's approach is fair? Explain in detail with supporting calculations 