Pet Emporium had a robbery on the weekend in which a large amount of inventory was taken. The loss is covered completely by insurance. A physical inventory count determined that the cost of the remaining merchandise is $58,700. The following additional information is available:
At Cost At Retail Beginning merchandise inventory $ 75,200 $ 93,950 Purchase returns and allowances 15,200 20,200 Purchases 1,311,670 1,732,250 Transportation-in 18,950 Sales 1,644,500 Sales returns and allowances 18,200
Required:
1. Prepare an estimate of ending merchandise inventory using the retail method.
2. Calculate the cost of the stolen inventory.
Pet Emporium had a robbery on the weekend in which a large amount of inventory was taken. The loss is covered completely by insurance. A physical inventory count determined that the cost of the remaining merchandise is $58,700. The following additional information is available:
At Cost At Retail Beginning merchandise inventory $ 75,200 $ 93,950 Purchase returns and allowances 15,200 20,200 Purchases 1,311,670 1,732,250 Transportation-in 18,950 Sales 1,644,500 Sales returns and allowances 18,200
Required:
1. Prepare an estimate of ending merchandise inventory using the retail method.
2. Calculate the cost of the stolen inventory.
Related questions
Given the following information, prepare in good form the costof goods sold section of an income statement for 20x5.
Freight-In | $ 4,000 |
Merchandise Inventory, December 31, 20x4 | 15,000 |
Merchandise Inventory, December 31, 20x5 | 16,000 |
Purchases | 38,000 |
Purchases Returns and Allowances | 1,800 |
ANS:
Merchandise Inventory, December 31, 20x4 | $ | ||
Purchases | $ | ||
Less Purchases Returns and Allowances |
| ||
Net purchases | $ | ||
Freight-in |
| ||
Net cost of purchases |
| ||
Cost of goods available for sale | $ | ||
Less Merchandise Inventory, December 31, 20x5 |
| ||
Cost of Goods Sold | $ |
