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Please help me answer the problem so I can have a better understanding of the problem Question #2 On December 19 2022 a major flood
Please help me answer the problem so I can have a better understanding of the problem
Question #2 On December 19 2022 a major flood destroyed the merchandise inventory of the Solid Glass Door Company. In a waterproof secure safe were the company' s records with the "o'lowing information: Solid Glass Door Company Trial Balance September 30, 2022 Debit Credit Cash . . . . . . . . . . . . . . $315,325 Accounts Receivable. . . . . . . . 36, 888 Inventory, December 31, 2021 . . . 129 J,226 Equipment. . . . . . . . . . . . . 200,775 Accumulated Depreciation . . . . . $ 32,670 Accounts Payable to Suppliers. . . 31,908 Other Current Liabilities. . . . . 2,000 Common Stock . . . . . . . . . . . 60,000 Retained Earnings. . . . . . . . . 41,482 Sales. . . . . . . . . . . . . . . 1,246,624 Sa:_es Returns and Allowances . . . 17,900 Purchases. . . . . . . . . . . 546,930 Purchase Returns and Allowances. . 3,582 Sales and Administrative Expenses. 50,657 Other General Expenses . . . . . . 120,565 __ $1,418,266 $1,418,266 Note: The Company's 12 month fiscal year ends December 31st. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: a. Correspondence with suppliers revealed unrecorded obligations at December 19th of $120,734. These unrecorded liabilities pertained to shipments in October totaling $58,365, shipments in November of $50,635, and $10,000 for shipments still in transit on December 19th shipped P04 lestination, and also $1,734 for shipments still in transit FOB Shipping Point. b. Customers of the company have acknowledged indebtedness of $94,950 as of December 19\". Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $12,650. Finally, based on past experience, it is estimated that 2.2 % of accounts receivable will be uncollectible. Additional Information Continues on the Next Page 0. Bank statements and the canceled checks enclosed with the statements for October, November and through December 19%, revealed _he following: October November December Disbursement Activity Payments on Accounts Payable Existing at September 30th $l9,650 $12,258 $ Paymen-s for October Inventory Shipments l1,650 21,460 10,695 Payments :or November Inventory Shipments 25,870 4,732 Payments for December Inventory Shipments 12,635 Deposit Activity Received on Account From Customers 18,125 14,330 2,224 Refund from Vendor For Merchandise Returned on August 31, 2022 3,950* *This refund was delayed until December 14, 2022 because the supplier lost the claim submitted by Solid Glass Door Company. d. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information obtainec from prior financial statements covering 2021 and 2020: For The Years Ended December 31St 2021 2020 Sales $671,108 $709,335 Sales Returns and Allowances 5,761 6,985 Beginning Inventory 57,569 50,345 Purchases 319,968 341,977 Purchase Returns and Allowances 1,235 916 Ending Inventory 129,226 57,569 Requhed L Prepare a schedule to determine the amount o: inventory loss from -he flood. 2 Do you feel the insurance company's approach is fair? Explain in detail with supporting calculationsStep by Step Solution
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