Westman Company lost most of its inventoryin a fire in December just before the year...
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Accounting
Westman Company lost most of its inventoryin a fire in December just before the year end physical inventory was taken. Corporate records disclose the following.
Inventory (beginning) $80,000
Purchases 290,000
Purchase returns 28,000
Sales revenue 415,000
sales returns 21,000
Gross profit % based on net selling price 35%
Merchandise of a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory.
Instructions:
Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method)
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