Question

I k iese, Intermediate Accounting, 17e Help System Announcements gnment CALCULATOR PRINTER VERSION BACK NEXT Exercise 9-15 Ivanhoe Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $41.800. Purchases since January I were $79,200; freighti, ,140 purchase returns and allowances, $2,640. Sales are made at 33 % above cost and totaled $126,000 to March 9. Goods costing $11.990 were left undamaged by the fire remaining goods were destroyed. Your answer is incorrect. Try again. Compute the cost of goods destroyed. (Round gross profit percentage and O decimal places, e.g. 15% or 125.) Cost of goods destroyed 7 8612 LINK TO TEXT Your answer is incorrect. Try again. % of sales. (Round ratios for computatio decimal places, c.78.72345% and final answer Compute the cost of goods destroyed, assuming that the gross profit is 33 to O decimal places, e.g. 28,987) Cost of goods destroyed Click If you would like to Show Work for this question: Open Show Work y Policy | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. MacBook Air

Answer 1

Solution 1:

Cost of goods sold = $126,000 / 133.333333% = $94,500

Ending merchandise inventory before fire = Beginning inventory + Net purchases - Cost of goods sold

= $41,800 + ($79,200 + $3,740 - $2,640) - $94,500

= $27,600

Cost of undamaged goods = $11,990

Cost of goods destroyed = $27,600 - $11,990 = $15,610

Solution 2:

Cost of goods sold = Sales - Gross profit = $126,000 - $126,000*33.33333% = $84,000

Ending merchandise inventory before fire = Beginning inventory + Net purchases - Cost of goods sold

= $41,800 + ($79,200 + $3,740 - $2,640) - $84,000

= $38,100

Cost of undamaged goods = $11,990

Cost of goods destroyed = $38,100 - $11,990 = $26,110