Solution-Estimate of inventory amounts immediately

Estimate of inventory amounts immediately preceding the fire

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Reference no: EM132254583

Question - Bonita 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	$253,400	$88,400	$44,500
Purchases to Aug. 18, 2017	1,502,000	381,700	161,400
Sales to Aug. 18, 2017	2,112,400	487,500	231,000

Required - Submit your estimate of the inventory amounts immediately preceding the fire.

Reference no: EM132254583

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Estimate of inventory amounts immediately preceding the fire

Reference no: EM132254583

Reference no: EM132254583

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