Assuming that the corporation had no insurance coverage

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Reference no: EM131211211

Wallace Company lost of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation books disclosed the following;

Begininng inventory $170,000

Purchases for the year $390,000

Purchases returns $30,000

Sales revenue $650,000

Sales returns $24,000

Rate of gross profit on net sales 40%.

Merchandise with a selling price of $ 21,000 remained undamaged after the fire. Damaged merchandise with original selling price of $15,000 had a net realizable value of $5,300.

Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.

Reference no: EM131211211

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