Compute the amount of inventory fire loss

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Question - Buffalo 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)  $81,300, Sales revenue $415,000, Purchases 285,400, Sales returns 20,800, Purchase returns 28,300, Gross profit % based on net selling price 33%.

Merchandise with a selling price of $30,400 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,900. The company does not carry fire insurance on its inventory.

Required - Compute the amount of inventory fire loss.

Reference no: EM133150275

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