Question

Morgan Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $34,800. Purchases since January 1 were $75,700 freight-in, $3,600; purchase returns and allowances, $2,400. Sales are made at 33 1/3% above cost and totaled $100,100 to March 9, Goods costing $9,800 were left undamaged by the fire; remaining goods were destroyed. ▼ (a) Your answer is incorrect. Try again. Compute the cost of goods destroyed. (Round gross profit percentage and final answer to 0 decimal places, e.g. 15% or 125,) Cost of goods destroyed 34833 LINK TO TEXT Attempts: 2 of 2 used ▼ (b) Your answer is incorrect. Try again Compute the cost of goods destroyed, assuming that the gross profit is 33 1 3% of sales. (R undrat os for computational purposes to S deci na Places, eg. 78.72345% and final answer to 0 decimal places, eg. 28,987.) 다.. "? Cost of goods destroyed s

Answer 1

(a)

Opening balance on Jan. 1	$34,800
Add: Purchase	75,700
Add: Freight	3,600
Less: Purchase Return	(2,400)
Less: Undamaged goods	(9,800)
Less: Cost of goods sold ($100,100 / 1.3333)	(75,077)
Cost of goods destroyed	$26,823

(b)

Opening balance on Jan. 1	$34,800
Add: Purchase	75,700
Add: Freight	3,600
Less: Purchase Return	(2,400)
Less: Undamaged goods	(9,800)
Less: Cost of goods sold {$100,100 x (1 - .3333)}	(66,737)
Cost of goods destroyed	$35,163