Question

Exercise 9-17 You are called by Tim Duncan of Sunland Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately The following data are available. Inventory, July 1 Purchases-goods placed in stock July 1-15 Sales revenue-goods delivered to customers (gross) Sales returns-goods returned to stock 39,900 87,800 114,600 4,300 Your client reports that the goods on hand on July 16 cost $31,400, but you determine that this figure includes goods of $6,000 received on a consignment basis. Your past records show that sales are made at approximately 25% over cost. Duncan's insurance covers only goods owned Compute the claim against the insurance company. Round ratios for computational purposes to 2 decimal places, eg. 78.73% and final answer to 0 decimal places, eg. 28,987 Claim against the insurance companys

Answer 1

Calculation of claim against insurance company
Particulars				Amount	Amount
Inventory at beginning					$     39,900.00
Purchases					$     87,800.00
goods at cost (A)					$ 1,27,700.00
Sale				$      1,14,600.00
less: Sale return				$            4,300.00
net sale				$      1,10,300.00
less: Gross profit (110300*25%/125%				$          22,060.00
net sale at cost (B)					$     88,240.00
inventory at cost (A)-(B)					$     39,460.00
less: inventory in hand (31400-6000)					$     25,400.00
Claim against insurance company					$     14,060.00