Question

Crane 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 $247,700 $90,100 $45,900 Purchases to Aug. 18, 2017 1,478,700 381,800 161,500 Sales to Aug. 18, 2017 2,086,500 484,900 203,000 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.)

Answer 1

		Lumber	Millwork	Hardware and fittings
	Inventory, Jan. 1, 2017	247700	90100	45900
	Purchases to Aug. 18, 2017	1478700	381800	161500
	Sales to Aug. 18, 2017	2086500	484900	203000
	GP on Cost	25%	30%	40%
	Statement Showing Cost of Closing Inventory
		Lumber	Millwork	Hardware and fittings
	Inventory, Jan. 1, 2017	$      247,700.00	$    90,100.00	$    45,900.00
	Purchases to Aug. 18, 2017	$ 1,478,700.00	$ 381,800.00	$ 161,500.00
	Cost of Goods Available	$ 1,726,400.00	$ 471,900.00	$ 207,400.00
	Less: Cost of Goods Sold (refer Working Note)	$ 1,669,200.00	$ 373,000.00	$ 145,000.00
	Cost of Goods Available as on 18.08.2017	$        57,200.00	$    98,900.00	$    62,400.00
Working	Cost of Goods Sold = Sales /(1+Gross profit Percentage)
	Lumber = 2086500/1.25	$ 1,669,200.00
	Millwork = 484900/1.30	$      373,000.00
	Hardware & Fitting = 203000/1.40	$      145,000.00