On 31 May 2022, Mars's closing inventory count was valued at a cost of $750,000. This included some items of inventory which had a cost of $180,000 but had been damaged in a fire on 10 April 2022. Consequently, these items are not expected to achieve their normal selling price which is calculated to achieve a gross profit margin of 25%. These damaged items require repairs at a cost of $105,000 to be sold. Calculate the revised closing inventory value of Mars to be reported in the statement of financial position at the year ended 31 May 2022.

On 31 May 2022, Mars's closing inventory count was valued at a cost of $750,000. This included some items of inventory which had a cost of $180,000 but had been damaged in a fire on 10 April 2022. Consequently, these items are not expected to achieve their normal selling price which is calculated to achieve a gross profit margin of 25%. These damaged items require repairs at a cost of $105,000 to be sold. Calculate the revised closing inventory value of Mars to be reported in the statement of financial position at the year ended 31 May 2022.

Name: On 31 May 2022, Mars's closing inventory count was valued at a cost of
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: On 31 May 2022, Mars's closing inventory count was valued at a cost of $750,000.This included some items of inventory which had a cost of $180,000 but had beendamaged in a fire on 10 April 2022. Consequently, these items are not expected toachieve th

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...

See similar textbooks

Similar questions

Company Edgar reported the following cost of goods sold but later realized that an error had been made in ending inventory for year 2021. The correct inventory amount for 2021 was 12,000. Once the error is corrected, (a) how much is the restated cost of goods sold for 2021? and (b) how much is the restated cost of goods sold for 2022?
1. On October 21, 2020, a fire destroyed the entire uninsured merchandise inventory of the Renan Merchandising Company. The following data are available: Inventory, January 1 P80,000; Markup percentage on cost 25%; Purchases, January 1 through October 21 P560,000; Sales, January 1 through October 21 P776,000.What is the approximate inventory loss as a result of the fire? choices: P19,200 P34,000 P58,000 P27,200 2. Daniel Company prepares monthly income statements. A physical inventory is taken only at year-end; hence, month-end inventories must be estimated. All sales are made on account. The rate of markup on cost is 50 percent. The following information relates to the month of August: Accounts receivable, August 1 P20,000; Accounts receivable, August 31 P30,000Collection of accounts receivable during August P50,000; Inventory, August 1 P36,000; Purchases of inventory during August P32,000. The estimated cost of the May 31 inventory is…
On November 21, 2024, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $15,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1, 2024 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales. $ 115,000 143,000 223,000 Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. Estimated loss from fire
Year end inventory is valued at £215,000. However, there are several items included within year end inventory which are damaged. In total, these items cost £74,000 and repair work is required amounting to £22,200 before they can be sold for £95,000. What is the total value of the year end inventory on the statement of financial position?
A company's inventory was destroyed in a fire on January 28, 2020. The company's December 31, 2019 inventory had a cost of P40P0,000. The company's gross profit has consistently been 30% of sales. During January the company purchased merchandise costing P360,000 and sales of P500,000 at regular selling prices. What is the estimated cost of the inventory that was destroyed on January 28, 2020?
What did i do wrong in my calculations? On November 21, 2021, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $18,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1 $ 130,000 Net purchases from November 1, to the date of the fire 146,000 Net sales from November 1, to the date of the fire 226,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 30% of net sales. Required:Calculate the estimated loss on the inventory from the fire, using the gross profit method. $134,200
Wormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.
A year ago, the net realizable value of ending inventory was $14,000, which exceeded the cost of $12,500. London has determined that the net realizable value of the March 31, 2021, ending inventory is $10,500
On November 21, 2024, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $26,000. The following information was available from the records of Hodge’s periodic inventory system: Inventory, November 1, 2024 $ 170,000 Net purchases from November 1, to the date of the fire 154,000 Net sales from November 1, to the date of the fire 234,000 Based on recent history, Hodge’s gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method.
How to solve these? The financial records of DISGRASYA Inc. were destroyed by fire at the end of 2020. Selected information gathered are the following: Inventory on January 1 was P92,000 and decreased by 20% during the year. Sales discount amounted to P17,000. Interest expense is P20,000. Cost of sales is P500,000. Administrative expenses amounted to 20% of cost of sales but only 8% of gross sales. Two thirds of operating expenses relate to sales activities. The company is subject to 30% income tax. How much is the net income (net loss) during 2020? The changes in account balances of ENIGMA Co. during 2020 are as follows: Assets: P133,500 increase Liabilities: P40,500 decrease Ordinary share capital: P90,000 increase Share premium: P9,000 increase. Assuming there are no changes in retained earnings except for net income and a dividend payment of P19,500, how much is the net income (net loss) for 2020? The following accounts and their balances appear in an unadjusted trial balance of…
On March 31, 2021, the warehouse of Mine Company was destroyed by fire. The company's markup on cost is 40%. The following information was obtained from the available records:Inventory, 12/31/2020 - P600,000Sales for the 1st quarter - P2,240,000Purchases for the 1st quarter - P1,750,000What is the cost of inventory immediately before the fire?
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $22,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $150,000 150,000 230,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. ✓ Answer is complete but not entirely correct. Estimated loss from fire $ 153,200 ×