Inventory Fire Loss
Kimbell Manufacturing began operations five years ago. On August 13, 2008, a fire broke out in the warehouse destroying all inventory and many accounting records relating to the inventory. The information available is presented below. All sales and purchases are on account.
|
|
January 1, 2008 |
August 13, 2008 |
|
Inventory |
$143,850 |
|
|
Accounts receivable |
130,590 |
$128,890 |
|
Accounts payable |
88,140 |
122,850 |
|
Collection on accounts receivable, January 1–August 13 |
|
753,800 |
|
Payments to suppliers, January 1–August 13 |
|
487,500 |
|
Goods out on consignment at August 13, at cost |
|
52,900 |
Summary of previous years’ sales:
|
2005 |
2006 |
2007 |
|
|
Sales |
$626,000 |
$705,000 |
$680,000 |
|
Gross profit on sales |
187,800 |
183,300 |
231,200 |
Instructions: Determine the inventory loss suffered as a result of the fire.