Question

You are called by Tim Duncan of Pearl 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		$ 35,500
Purchases—goods placed in stock July 1–15		92,400
Sales revenue—goods delivered to customers (gross)		113,200
Sales returns—goods returned to stock		4,300

Send to Gradebook < Prev Next > --/1 Question 4 View Policies Current Attempt in Progress You are called by Tim Duncan of Pearl 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 $ 35.500 92,400 113,200 4,300 Your client reports that the goods on hand on July 16 cost $32,000, but you determine that this figure includes goods of $5,700 received on a consignment basis. Your past records show that sales are made at approximately 40% 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, e.g. 78.73% and final answer to O decimal places, eg. 28,987.) Claim against the insurance company $ e Textbook and Media Attempts: 0 of 3 used Save for Later Submit Answer Send to Gradebook < Prev Next >

Your client reports that the goods on hand on July 16 cost $32,000, but you determine that this figure includes goods of $5,700 received on a consignment basis. Your past records show that sales are made at approximately 40% over cost. Duncan’s insurance covers only goods owned.

Answer 1

Solution:

Claim against insurance company = Total cost of goods available for sales - Cost of goods sold - Owned inventory on hand on July 16

= ($35,500 + $92,400) - [($113,200 - $4,300)*100/140)] - ($32,000- $5,700)

= $127,900 - $77,786 - $26,300

= $23,814