10 points 02:59:17 High Steppers, Inc. is a retailer of women's fitness shoes which began operations on January 2, 20X5. During a recent storm in 20X6 the warehouse was flooded and the entire inventory of shoes was either damaged or destroyed. The controller, Erin Whitehead, needs to determine the value of the inventory as of date of the flood, April 6, 20X6, in order to complete the insurance claim. She has asked Edward Stevens, one of the staff accountants, to prepare a memo regarding the valuation of the Inventory and the estimated insurance claim, Review the memo from the staff accountant to the controller and make any changes necessary to ensure it is accurate and consistent with the information and documents provided. (For each section of underlined text below select the needed correction from the dropdown list. If the underlined text is already correct in the context of the memo, select (Original text) from the list. If none of the choices are correct, select [Delete text] from the list.) Account Balances Inventory Clerk Email Warehouse Manager Email Financial Statement Excerpts Purchases Recap Sales Recan 10 points 02:58:16 To From: Date: RES High Steppers, Inc. Erin Whitehead, Controller Edward Stevens, Staff Accountant May 1, 20X6 Valuation of Inventory Per your request, I have reviewed the records and documents in order to estimate the ending inventory on April 6, 20X6. Below are my findings In order to determine the ending inventory on the date of the flood, an estimate for cost of goods sold in this situation, I discovered that GAAP only allows the inventory valuation method. normally used by the company for interim financial statements or to determine the value. of inventory that is destroyed. Choose an option Using this method, the recomputed estimate for the cost of goods sold is $325,875 as of April 5. Choose an option Based on the reconstructed cost of goods sold, I have computed that High Steppers, Inc. should report an estimated ending inventory of $66.386 on its interim financial statements dated April 5, 20X6 Choose an option According to the accounting records, the estimated number of units destroyed or damaged by the flood is 10,200 units, which equals the beginning units plus purchased less units sold as of April 5. Choose an option When determining the insurance claim, all the units purchased through April 5 are included since the shipping terms are FOB, shipping point Choose an option Therefore, the insurance claim should be based on an inventory value of $33,016. Choose an option Sincerely, Edward Stevens Staff Accountant