Question

On April 15, 2018, fire damaged the office and warehouse of Tamarisk Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared.

TAMARISK CORPORATION MARCH 31, 2018
Cash	$19,230
Accounts receivable	42,450
Inventory, December 31, 2017	72,170
Land	35,190
Buildings	113,870
Accumulated depreciation		$40,663
Equipment	3,260
Accounts payable		24,316
Other accrued expenses		5,952
Common stock		104,900
Retained earnings		54,140
Sales revenue		135,040
Purchases	54,140
Miscellaneous expense	24,701
	$365,011	$365,011

The following data and information have been gathered.

1.		The fiscal year of the corporation ends on December 31.
2.		An examination of the April bank statement and canceled checks revealed that checks written during the period April 1–15 totaled $13,490: $5,148 paid to accounts payable as of March 31, $3,264 for April merchandise shipments, and $3,859 paid for other expenses. Deposits during the same period amounted to $12,888, which consisted of receipts on account from customers with the exception of a $1,031 refund from a vendor for merchandise returned in April.
3.		Correspondence with suppliers revealed unrecorded obligations at April 15 of $15,220 for April merchandise shipments, including $2,198 for shipments in transit (f.o.b. shipping point) on that date.
4.		Customers acknowledged indebtedness of $49,170 at April 15, 2018. It was also estimated that customers owed another $7,760 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $658 will probably be uncollectible.
5.		The companies insuring the inventory agreed that the corporation’s fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation’s audited financial statements disclosed this information:
		Year Ended December 31 2017 2016 Net sales $487,270 $416,570 Net purchases 278,140 232,620 Beginning inventory 51,200 64,120 Ending inventory 72,170 51,200
6.		Inventory with a cost of $7,470 was salvaged and sold for $3,720. The balance of the inventory was a total loss.

Compute the amount of inventory fire loss. (Round ratios for computational purposes to 2 decimal places, e.g 78.52% and final answer to 0 decimal places, e.g. 28,987.)

Inventory fire loss

$ ?

Answer 1

lldy (043-333) Wk 07 (17 (16) Tamarisk Corporation Trading Ale for 2017 and 2016 To Inventory) 512087 96.190 To purtetase 378740 232620 By sales 1487 u ending 72170 5 1,200 pyor 230100 771030 Inventory (balancing rigure to 559440 467770 1599440 46770 2017 2016 is ross profit Ratio 117030 19 30100 gross profit x 100 Netsales 487270 1416570 Xlow simple Taking average of 2016 and 2017 = 47.29% = 41.06% (фруу gross profit of g pratio 41,06+ 47.26 "God has no religion. 2 year

State Memorandum Tra. as on 15/04/2018 To opent ng 72170 Inventory y purchases 54140 + April pwechase 3264 57 404 To gross Bysales 135040 e Return (1031) Netsales T34009 By Stockim 2198 transit Lunch closing ų stock isproht on 59,152 52,519 Netsales (approx) go down) - balancing 14 Sunday (44.14% of 134009 figure 188726 188726 Eve.

(016-320) Wk Os statement of claim " 52,519 7470 (3720 value of closing stock less salvaged stock. . (sold stock) (sale value is to be taken) Balance of Imrentory lying at godown 48799 Lunch amocent of Inventory pire Hoss - 48,799 16