9-9 B Coronado Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $155,900,...

9-9 B

Coronado Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $155,900, and purchases for January through April totaled $529,000. Sales revenue for the same period were $654,700. Coronado’s normal gross profit percentage is 30% on sales.

Using the gross profit method, estimate Coronado’s April 30 inventory that was destroyed by fire.

Estimated ending inventory destroyed in fire

Expert Solution

Estimated ending inventory destroyed in fire $226,610

Working:

Step-1:Calculate cost of goods sold

Sales Revenue	a	$ 6,54,700
Less:Gross profit	b=a*30%	$ 1,96,410
Cost of goods sold		$ 4,58,290

Step-2:Calculate cost of goods Avaialble for sale

Beginning Inventory		$ 1,55,900
Purchase - January through April		$ 5,29,000
cost of goods available for sale		$ 6,84,900

Step-3:Calculate estimated ending inventory destroyed by fire

Cost of goods available for sale		$ 6,84,900
Less:Cost of goods sold		$ 4,58,290

Ending Inventory destroyed by fire		$ 2,26,610

ekkarill92 answered 2 years ago

On June 30, 2019, a fire completely destroyed the entire UFV facilities inventory warehouse. Luckily, the...

On June 30, 2019, a fire completely destroyed the entire UFV facilities inventory warehouse. Luckily, the accountant had just taken the accounting records home so no accounting records were lost in the fire. UFV wants to file an insurance claim as soon as possible for their lost inventory. The accountant provides you with the following information: Purchases through June 30, 2019 $870,500 Net sales revenue through June 30, 2019 $1,361,700 You also determine that the...

Prior to a fire that destroyed most of its inventory, Tejada Company had inventory purchases during...

Prior to a fire that destroyed most of its inventory, Tejada Company had inventory purchases during the period of $40,000 and sales of $125,000. Tejada began the period with $95,000 in inventory. Tejada's typical gross profit percentage is 20 percent. Inventory that cost $5,000 survived the fire. Using the gross profit method, estimate the inventory loss from the fire. (Show your work.) Assuming the ending inventory for 2013 was overstated, indicate whether each of the following will be: a. Understated...

The master inventory file, contained on a removable magnetic disk, was destroyed by a small fire...

The master inventory file, contained on a removable magnetic disk, was destroyed by a small fire next to the area where it was stored. The company had to take a special complete inventory in order to reestablish the file. The best control procedure would be: a. fire insurance b. data processing insurance c. a copy of the disk d.Remote storage of a copy of the disk and the transactions since the disk was copied

Q. The inventory of Ahrsun Ventures Corporation was destroyed by fire on February 29, 2020. The...

Q. The inventory of Ahrsun Ventures Corporation was destroyed by fire on February 29, 2020. The following data is for the first two months of the year: Sales $51,000, Sales Returns and Allowances $1,000, Purchases $28,200; Freight-In $1,200; and Purchase Discounts $1,400. According to the financial statements at year-end December 31, 2019 the balance of Merchandise Inventory was $20,000. Ahrsun Ventures has a gross profit rate of 30% on net sales and uses the periodic method of inventory. REQUIRED: Determine...

Problem 8-28B Computing variances A fire destroyed most of Ordessa Products Corporation’s records. Megan Carey, the...

Problem 8-28B Computing variances A fire destroyed most of Ordessa Products Corporation’s records. Megan Carey, the company’s accountant, is trying to piece together the company’s operating results from salvaged documents. She discovered the following data: Standard materials quantity per unit 2.5 pounds Standard materials price $8 per pound Standard labor quantity per unit 0.6 hour Standard labor price $24 per hour Actual number of products produced 8,000 units Materials price variance $3,168 Favorable Materials usage variance $1,600 Favorable Labor price...

On November 15, 2020, a fire destroyed Youngstown Inc.’s warehouse where inventory is stored. It is...

On November 15, 2020, a fire destroyed Youngstown Inc.’s warehouse where inventory is stored. It is estimated that $20,000 can be realized from sale of usable but damaged inventory. The accounting records concerning inventory reveal the following. Based on recent records, gross margin has averaged 35% of net sales. Inventory at Nov. 1, 2020 $240,000 Purchases from Nov. 1, 2020, to Nov. 15, 2020 280,000 Net sales from Nov. 1, 2020, to Nov. 15, 2020 400,000 a. Calculate the estimated...

On January 1, 2020, Coronado Company purchased at face value, a $1300, 9% bond that pays...

On January 1, 2020, Coronado Company purchased at face value, a $1300, 9% bond that pays interest on January 1. Coronado Company has a calendar year end. The entry for the receipt of interest on January 1, 2021 is Outstanding stock of the Sheridan Corporation included 20800 shares of $5 par common stock and 5100 shares of 6%, $10 par noncumulative preferred stock. In 2019, Sheridan declared and paid dividends of $1900. In 2020, Sheridan declared and paid dividends of...

On January 10, 2016, a fire destroyed a warehouse owned by NP Company. NP’s adjusted basis...

On January 10, 2016, a fire destroyed a warehouse owned by NP Company. NP’s adjusted basis in the warehouse was $590,000. On March 12, 2016, NP received a $770,000 reimbursement from its insurance company. In each of the following cases: A. Determine NP’s recognized gain on this property disposition. Assume that NP would elect to defer gain recognition when possible. NP’s board of directors decided not to replace the warehouse. B. Determine NP’s recognized gain on this property disposition. Assume...

On January 10, 2017, a fire destroyed a warehouse owned by NP Company. NP’s adjusted basis...

On January 10, 2017, a fire destroyed a warehouse owned by NP Company. NP’s adjusted basis in the warehouse was $575,000. On March 12, 2017, NP received a $740,000 reimbursement from its insurance company. In each of the following cases: Determine NP’s recognized gain on this property disposition. Assume that NP would elect to defer gain recognition when possible. NP’s board of directors decided not to replace the warehouse. Determine NP’s recognized gain on this property disposition. Assume that NP...

1. ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020....

1. ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020. On December 1, 2020 the corporation received an insurance payment of $900,000 for the loss. The corporation’s basis in the warehouse just prior to the loss was $500,000. The corporation would like to use the involuntary conversion rules to defer as much gain as possible. Assume the corporation built a new warehouse on the old site within the required timeframe and incurred construction costs...

Question