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Chapter 8 Problem 3 At the start of this academic quarter, an accounting textbook retailer suffered a fireat its store, leaving the accounting students at

Chapter 8 Problem 3
At the start of this academic quarter, an accounting textbook retailer suffered a fireat its store, leaving the accounting students at the nearby university without textbooks! (%
The company requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,000. Purchases since January 1 were $72,000; freight-in, $3,400; purchase returns and allowances, $2,400. Sales are made at 3313% above cost and totaled $100,000 to March 9. Goods costing $10,900 were left undamaged by the fire; remaining goods were destroyed.
Part 1: Compute the cost of goods destroyed.
Goods Available for Sale = Merchandise on Hand + Purchases + Preight in=
38,000+72,000+34,00=$113,400
Sales = Cost **1.33
100,0001.33= Cost
Cost =$75,000
Goods Available for Sale - Cost of goods sold = Ending inventory
113,400-75,000=$38,400
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