Question

On July 8, a fire destroyed the entire merchandise inventory onhand of Larrenaga Wholesale Corporation. The following informationis available: Sales, January 1 through July 8 $690,000 Inventory, January 1 140,000 Purchases, January 1 through July 8 655,000 Gross profit ratio 20% What is theestimated inventory on July 8 immediately prior to the fire?

Name: on july 8 a fire destroyed the entire merchandise inventory onhand of larrenaga wholesale corporation the following informationis available sales january 1 through july 8 690000 inventory ja 77937
Uploaded: 2022-05-07T14:45:34-08:00
Duration: 2 min 30 s
Channel: Aya Bianca Into
Description: on july 8 a fire destroyed the entire merchandise inventory onhand of larrenaga wholesale corporation the following informationis available sales january 1 through july 8 690000 inventory ja 77937

          On July 8, a fire destroyed the entire merchandise inventory onhand of Larrenaga Wholesale Corporation. The following informationis available:    Sales, January 1 through July 8 $690,000     Inventory, January 1 140,000     Purchases, January 1 through July 8 655,000     Gross profit ratio 20%   What is theestimated inventory on July 8 immediately prior to the fire?

Added by Kenneth B.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Aya Bianca Into

05/07/2022

Step 1

We know that the gross profit ratio is 20%, which means the cost ratio is 80% (100% - 20%). So, the COGS is 80% of the sales, which is $690,000 * 80% = $552,000. Show more…

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On July 8, a fire destroyed the entire merchandise inventory onhand of Larrenaga Wholesale Corporation. The following informationis available: Sales, January 1 through July 8 $690,000 Inventory, January 1 140,000 Purchases, January 1 through July 8 655,000 Gross profit ratio 20% What is theestimated inventory on July 8 immediately prior to the fire?