Reference no: EM132251495

Question - Concord Corp. lost most of its inventory in a fire in December, just before the year-end physical inventory was taken. The corporation's books disclosed the following:

Beginning inventory $360,000

Sales $1,339,500

Purchases for the year 920,000

Sales returns 49,000

Purchase returns 82,000

Gross margin on sales 40%

Merchandise with a selling price of $40,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $32,000 had a net realizable value of $11,600.

Calculate the amount lost because of the fire, assuming that the corporation had no insurance coverage

Prepare the journal entry to record the loss and account for the damaged inventory in a separate Damaged Inventory account. In the same entry, record cost of goods sold for the year ended December 31.