Question

Marigold Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost. Lumber 25% Millwork 30% Hardware and fittings 40% On August 18, a fire destroyed the office, lumber shed, and a considerable portion of the lumber stacked in the yard. To file a report of loss for insurance purposes, the company must know what the inventories were immediately preceding the fire. No detail or perpetual inventory records of any kind were maintained. The only pertinent information you are able to obtain are the following facts from the general ledger, which was kept in a fireproof vault and thus escaped destruction. Inventory, Jan. 1, 2020 Purchases to Aug. 18, 2020 Sales to Aug. 18, 2020 Lumber Millwork Hardware $246,600 $91,300 $44,100 1,479,900 378,000 162,800 2,059,300 536,900 218,400 Submit your estimate of the inventory amounts immediately preceding the fire. (Round ratios for computational purposes to 5 decimal places, e.g. 78.74265% and final answers to 0 decimal places, e.g. 28,987.)

Answer 1

1) calculate estimated cost of lost in the fire

	Lumber	Millwork	Hardware
Beginning inventory	246600	91300	44100
Purchase	1479900	378000	162800
Cost of goods available for sale	1726500	469300	206900
Less: Cost of goods sold	2059300*100/125 = -1647440	536900*100/130 = -413000	218400*100/140 = -156000
Inventory lost in fire	79060	56300	50900