Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On May 6, 2020 a flash flood caused damage to the merchandise stored in the warehouse of Cebu Co. you were asked to submit an
On May 6, 2020 a flash flood caused damage to the merchandise stored in the warehouse of Cebu Co. you were asked to
submit an estimate of the merchandise destroyed in the warehouse. The following data were established:
Net sales for 2019 were P1,600,000, matched against cost of P1,120,000.
Merchandise inventory, January 1, 2020 was P400,000, 90% of which was in the warehouse and 10% in
downtown showrooms.
For January 1, 2020, you ascertained invoice value of purchases (all stores in the warehouse), P200,000; freight
inward, P8,000; purchases returned. P12,000.
Cost of merchandise transferred from the warehouse to showrooms was P16,000, and net sales from January 1 to
May 6, 2020 (all warehouse stock) were P640,000.
Assuming gross profit rate in 2020 to be the same as in the previous year.
10. The estimated merchandise destroyed by the flood was:
a. 100,000
b. 108,000
c. 88,000
d. 92,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started