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 $\frac{331}{3}\%$ 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 $**1\mathrm{.}33$

$100,\frac{000}{1\mathrm{.}33}=$ Cost

Cost $=$$$75,000$

Goods Available for Sale $-$ Cost of goods sold $=$ Ending inventory

$113,400-75,000=$$$38,400$