What was the cost of the merchandise destroyed by fire

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Reference no: EM132754863

The Manila Branch of the Great Company is billed for merchandise by the home office at 20% above cost. The branch in turn prices merchandise for sales purposes at 25% above billed price. On February 16, all of the branch merchandise is destroyed by fire. No insurance was maintained. Branch accounts show the following information:

Merchandise inventory, January 1 at billed price        P26,400
Shipments from home office (Jan. 1 - Feb. 16)          20,000
Sales                                                                15,000
Sales returns and allowances                                  3,000

Problem 1: What was the cost of the merchandise destroyed by fire?

Reference no: EM132754863

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