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A Company bills its C Branch for shipments of goods at 25% above its cost. At the close of business on October 31, 2015, a fire gutted the branch warehouse and destroyed 60% of the merchandise stock stored therein. The following data were gathered:
Jan. 1, inventory at billed price 50,000Shipments from HO to Oct. 31 130,000Net sales to Oct. 31 225,000
Problem 1: If undamaged merchandise recovered are marked to sell for 30,000, the estimated cost of the merchandise destroyed by fire was?
a. 14,400b. 21,600c. 24,000d. 27,500
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