Determine the cost of the inventory that was destroyed

Reference no: EM131933339

Problem

Othello is a small pharmaceuticals store in Sydney. On the night of 27 June a fire incident destroyed the entire store and hence the inventory. The accounting records, which survived the fire, contained the following account balances for the period 1 January to 27 June:

Sales $330700

Sales returns and allowances $4200

Purchases $285000

Purchases returns and allowances $3150

Freight inwards $2400

Inventory balance, 1 January $59 300

Othello store has averaged 42% gross profit margin over the last 5 years.

Required (show all workings):

Determine the cost of the inventory that was destroyed, for insurance purposes.

Reference no: EM131933339

Questions Cloud

Protection for new products in the marketplace : Patents provide protection for new products in the marketplace. Patent protection allows pharmaceutical companies to sell drugs for a number of years

What will you pay for a share : Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9.90, but management expects to reduce the payout by 5 percent per year.

What factors have led to increased organizational interest : What factors have led to increased organizational interest in HR metrics and workforce analysis.

Effect of internet sales on an individual state : What is the effect of internet sales on an individual state's ability to raise sales tax revenue and what could be done to remedy the situation?

Determine the cost of the inventory that was destroyed : Othello is a small pharmaceuticals store in Sydney. Determine the cost of the inventory that was destroyed, for insurance purposes.

Approach for enhancing skills in leadership important : Why is Emotional Intelligence Approach for Enhancing Skills in Leadership important?

Determine the present value of the net savings : Determine the present value of the net savings that would result from undertaking the proposed project. Calculate a benefit-cost ratio.

What would be the increase in net operating income : Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000. What would be the increase in net operating income?

What is the best arrangement to rotate the break : How would this union break regulation affects the average total time each applicant spends in DMV for this written test process?

User Account

All Pages