Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Fruit Toppings Required: 1. Calculate the estimated cost of each of the toppings lost in the fire. Marshmallow Chocolate Fruit Toppings $ 24,000 170,000 220,000 Estimated cost of lost Inventory 20% Marshmallow Toppings $ 7,400 40,000 59,000 30% Chocolate Toppings $3,400 12,400 20,400 30%
Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Fruit Toppings Required: 1. Calculate the estimated cost of each of the toppings lost in the fire. Marshmallow Chocolate Fruit Toppings $ 24,000 170,000 220,000 Estimated cost of lost Inventory 20% Marshmallow Toppings $ 7,400 40,000 59,000 30% Chocolate Toppings $3,400 12,400 20,400 30%
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1CP
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Transcribed Image Text:Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes.
On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the
warehouse. The company must provide its insurance company with an estimate of the amount of
inventory lost. The following information is available from the company's accounting records:
Inventory, January 1, 2024
Net purchases through November 17
Net sales through November 17
Historical gross profit ratio
Fruit
Toppings
Required:
1. Calculate the estimated cost of each of the toppings lost in the fire.
Marshmallow
Chocolate
Fruit
Toppings
$ 24,000
170,000
220,000
Estimated cost of lost
Inventory
20%
Marshmallow
Toppings
$ 7,400
40,000
59,000
30%
Chocolate
Toppings
$3,400
12,400
20,400
30%
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