Franklin Co. has experienced gross profit ratios for 2013, 2012, and 2011 of 34.00%, 30.75%, and 32.75%,
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Question:
Franklin Co. has experienced gross profit ratios for 2013, 2012, and 2011 of 34.00%, 30.75%, and 32.75%, respectively. On April 3, 2014, the firm's plant and all of its inventory were destroyed by a tornado.
Accounting records for 2014, which were available because they were stored in a protected vault, showed the following: |
Sales from January 1 thru April 2 | $ | 140,330 |
January 1 inventory amount | 63,680 | |
Purchases of inventory from January 1 thru April 2 | 118,778 |
Required: |
Calculate the amount of the insurance claim to be filed for the inventory destroyed in the tornado. (Hint: Use the cost of goods sold model and a gross profit ratio that will result in the largest claim.) (Round your answer to nearest whole dollar amount.) |
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