E9-18 (L04) (Gross Profit Method) Gheorghe Moresan Lumber Company handles three principal lines of merchandise with these varying rates of gross profit on cost.

Lumber 25% Millwork 30% Hardware and ttings 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.

160,000 640,000 30,000 1,000,000 70,000 12,000

Inventory, Jan. 1, 2017 Purchases to Aug. 18, 2017 Sales revenue to Aug. 18, 2017

Lumber

$ 250,000 1,500,000 2,080,000

Millwork

$ 90,000 375,000 533,000

Hardware

$ 45,000 160,000 210,000

480 Chapter 9 Inventories: Additional Valuation Issues

Instructions

Submit your estimate of the inventory amounts immediately preceding the fire. PLEASE SHOW CALCULATIONS