Reference no: EM132599743

Question - On October 1, 20x1, the warehouse of ABC Co. and all inventories contained therein were damaged by flood. Off-site back up base shows the following information:

Inventory, Jan. 1 10,000

Accounts payable, Jan. 1 3,000

Accounts payable, Sept. 30 2,000

Payments to suppliers 50,000

Freight-in 500

Purchase returns 500

Sales from Jan. to Sept. 80,000

Sales returns 5,000

Sales discounts 2,000

Gross profit rate based on sales 30%

Additional information:

Goods in transit as of October 1, 20x1 amounted to P1,000, cost of goods out on consignment is P1,200, and materials damaged by flood can be sold at a salvage value of P1,800. How much is the inventory loss due to the flood?

a. 2,500

b. 4,900

c. Answer not given

d. 4,400

e. 3,000