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Question - The new branch of Resilient Company is billed for merchandise it receives at 125% of cost. The branch turns around and sells them at 25% above billed price. Subsequently on June 30, 2020, the entire branch's merchandise was destroyed by fire. The recovered branch records show the following:
Beg. Inventory (all at Home office billed price) $391,250
Shipments, January 1 to June 30 (at billed price) 247,500
Purchases (at cost) from other sources (all resold at markup of 30% on cost) 20,500
Sales 407,500
Sales returns and allowances 7,500
Required - How much is the cost of the merchandise destroyed by fire?
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