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On April 25, 2016, a flash flood destroyed one of High River Companys warehouses, including all of the inventory inside. The flood did not affect
On April 25, 2016, a flash flood destroyed one of High River Companys warehouses, including all of the inventory inside. The flood did not affect the inventory held at the companys other locations. The accounting records were kept at High Rivers head office in Canmore. A search through the records revealed the following information:
Purchases up to April 25 | $765,071 | |
Cost of inventory on hand, January 1 | $142,516 | |
Sales up to April 25 | $1,037,400 | |
Cost-to-sales ratio for 2016 | 66% |
A count of inventory on hand at the other locations revealed that inventory costed at $115,420 was on hand. Estimate the cost of the inventory that was destroyed in the flash flood.
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