(Gross Profit Method) You are called by Kevin Garnett of Celtic Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately. The following data are available.
|
Inventory, July 1 |
$ 38,000 |
|
Purchases—goods placed in stock July 1–15 |
90,000 |
|
Sales—goods delivered to customers (gross) |
116,000 |
|
Sales returns—goods returned to stock |
4,000 |
Your client reports that the goods on hand on July 16 cost $30,500, but you determine that this figure includes goods of $6,000 received on a consignment basis. Your past records show that sales are made at approximately 25% over cost. Garnett’s insurance covers only goods owned.
Instructions
Compute the claim against the insurance company.