Answer:
a. Merchandise lost by fire value = $20,760
b. Merchandise lost by fire value = $25,770
Explanation:
Net sales = $51,000 - $1,100
= $49,900
Net purchase cost = $31,000 + 1,200 - $1,500
= $30,700
a. Gross profit = $49,900 × 40%
= $19,960
Cost of goods sold = $49,900 - $19,960
= $29,940
Cost of goods sold = beginning inventory + Purchases - ending inventory
= $29,940 = $20,000 + $30,700 - ending inventory
Ending inventory = $20,760
Merchandise lost by fire value = $20,760
b. Gross profit = $49,900 × 30%
= $14,970
Cost of goods sold = $49,900 - $14,970
= $34,930
Cost of goods sold = beginning inventory + Purchases - ending inventory
= $34,930 = $30,000 + $30,700 - ending inventory
ending inventory = $25,770
Merchandise lost by fire value = $25,770
