Inventory / Gross Profit Method

Gross profit method The Walnut Shop is a furniture company that uses a periodic inventory system. On February 8, 2016, a fire destroyed all the furniture on display in the company's main showroom. Fortunately, $35,000 of the company's inventory was located in a separate warehouse and was not damaged by the fire. Walnut Shop now is attempting to determine the cost of the merchandise destroyed in the fire from the following information:

Net Sales during 2016, through February 8th			$	340.000
Ending Inventory, December 31th, 2015			$	120.000
Purchases in 2016 through February 8th			$	185.000
Historical Rate of Gross Profit				48%

Instruction: (show your calculations and round to 2 decimal places)

a . The Cost of Goods available for sale through February 8th, 2016. $________

b The Cost of Goods sold in 2016 through February 8^th. $________

c The estimated Total Inventory on hand on February 8th, prior to the fire. $________

d The cost of the Inventory lost in the fire. $________

Depreciation and Book Value

Depreciation; gains and losses in financial statements In 2015, Amalfi, Inc. purchased equipment with an estimated 10-year life for $49,000. The residual value was estimated at $5,000. Amalfi uses straight-line depreciation and applies the half-year convention. On April 18, 2017, Amalfi closed one of its plants and sold this equipment for $33,600. Instruction: (show your calculations and round to 2 decimal places) Under these assumptions, compute the following for this equipment: a Depreciation expense in 2015. $________ b Depreciation expense in 2016. $________ c Depreciation expense in 2017. $________ d Book Value at the date of sale in 2017. $_______ f Gain or Loss (underline) on the sale in 2017. $________