Question

Martinez 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.

Lumber Millwork    Hardware

Inventory, Jan. 1, 2017    $248,700 $88,200 $44,100

Purchases to Aug. 18, 2017    1,529,500    368,800 161,900

Sales to Aug. 18, 2017    2,104,000    578,500    198,800

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.)

   Lumber    Millwork Hardware

Inventory $????? $????? $??????

Answer 1

	Lumber	Millwork	Hardware
Sales to Aug. 18, 2017	2104000	578500	198800
Gross profit on cost	25%	30%	40%
Cost of goods sold	1683200	445000	142000
	($2104000/1.25)	($578500/1.30)	($198800/1.40)

	Lumber	Millwork	Hardware
Inventory, Jan. 1, 2017	248700	88200	44100
Purchases to Aug. 18, 2017	1529500	368800	161900
Cost of goods available for sale	1778200	457000	206000
Less: Cost of goods sold	1683200	445000	142000
Inventory, Aug. 18, 2017	95000	12000	64000