Business, 31.03.2021 01:00 unknown6669

(Gross Profit Method) Tim Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $72,000; freight-in, $3,400; purchase returns and allowances, $2,400. Sales are made at 331/3% above cost and totaled $100,000 to March 9. Goods costing $10,900 were left undamaged by the fire; remaining goods were destroyed. Instructions
(a) Compute the cost of goods destroyed.
(b) Compute the cost of goods destroyed, assuming that the gross profit is 331/3% of sales.

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Answer from: heyitseddie06

a. $25,100

b. $33,433

Explanation:

Part a

Sales $100,000

Less Cost of Sales :

Opening Merchandise $38,000

Add Purchases $72,000

Add Freight In $3,400

Less Purchase Return and Allowance ($2,400)

Total 111,000

Less Undamaged Inventory ($10,900)

Total $100,100

Less goods destroyed ($25,100) ($75,000)

Gross Profit $25,000

Part b

Sales $100,000

Less Cost of Sales :

Opening Merchandise $38,000

Add Purchases $72,000

Add Freight In $3,400

Less Purchase Return and Allowance ($2,400)

Total 111,000

Less Undamaged Inventory ($10,900)

Total $100,100

Less goods destroyed ($33,433) ($66,667)

Gross Profit $33,333

Answer from: Quest

exaclty 30 degrees celcius is the answer

Answer from: Quest

the answer is a. $209,000

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(Gross Profit Method) Tim Legler requires an estimate of the cost of goods lost by fire on March 9....

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