Formal labeled schedule computing the fire loss incurred

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Reference no: EM13789236

Westman Company lost most of its inventory in a fire in December just before the yearend physical inventory was taken. Corporate records disclose the following.

Inventory (beginning) $80,000

Purchases 290,000

Purchase returns 28,000

Sales revenue 415,000

Sales returns 21,000

Gross profit % based on net selling price 35%

Merchandise of a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory.

Instructions:

Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method)

Reference no: EM13789236

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