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Loss from fire

I am lost on this and I need your help... Please put in excel. Thank you.

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Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.

Inventory (beginning) $80,000
Purchases 290,000
Purchase returns 28,000
Sales 415,000
Sales returns 21,000
Gross profit % based on net selling price 35%

Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a salvage value of $8,150. The company does not carry fire insurance on its inventory.

Instructions

Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)

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Solution Summary

The solution explains how to calculate the inventory lost in fire using the gross profit method

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