Xiamen Inc. lost most of its inventory in a fire on Dec 28, just before the year-end physical inventory count was taken. Luckily, Xiamens accounting records were intact, and the company had fire insurance.

The companys books disclosed the following.

Xiamen Inc. lost most of its inventory in a fire on Dec 28, just before the year-end physical inventory count was taken. Luckily, Xiamens accounting records were intact, and the company had fire insurance.

The companys books disclosed the following.

Beginning inventory	$80,000	Sales	$415,000
Purchases for the year	290,000	Sales returns	21,000
Purchase returns	28,000	Rate of gross margin on net sales	30%

Xiamen discovered that merchandise with a selling price of $3,500 remained undamaged after the fire.

Determine how much Xiamen may legitimately claim from the Insurance Company [2 marks].

No credit for answers submitted without plausible calculations

Consider using this table to organize your calculations
Beginning Inventory
Purchases
Purchase Returns
Goods Available for Sale at Cost
Sales
Sales Returns
Net Sales
Estimated Cost of Goods Sold

Answer: Xiamen may legitimately claim $

Xiamen discovered that merchandise with a selling price of $3,500 remained undamaged after the fire.

Determine how much Xiamen may legitimately claim from the Insurance Company [2 marks].

No credit for answers submitted without plausible calculations

Consider using this table to organize your calculations
Beginning Inventory
Purchases
Purchase Returns
Goods Available for Sale at Cost
Sales
Sales Returns
Net Sales
Estimated Cost of Goods Sold

Answer: Xiamen may legitimately claim $