(Gross Profit Method) Eastman Company lost most of its inventory in a fire in December just before the year end physical inventory was taken. Corporate records disclose the following.
|
Inventory (beginning) |
$ 80,000 |
Sales |
$415,000 |
|
Purchases |
290,000 |
Sales returns |
21,000 |
|
Purchase returns |
28,000 |
Gross profit % based on net selling price |
35% |
Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a salvage 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.