A flash flood swept through Dad, Inc.’s warehouse on May 1. After the flood, Dad’s accounting records showed the following:
Inventory, January 1
$35,000
Purchases, January 1 through May 1
200,000
Sales, January 1 through May 1
250,000
Inventory not damaged by flood
30,000
Gross profit percentage on sales
40%
What amount of inventory was lost in the flood?
A. $55,000
B. $85,000
C. $120,000
D. $150,000
A flash flood swept through Dad, Inc.’s warehouse on May 1. After the flood, Dad’s accounting records showed the following:
| Inventory, January 1 | $35,000 | |
| Purchases, January 1 through May 1 | 200,000 | |
| Sales, January 1 through May 1 | 250,000 | |
| Inventory not damaged by flood | 30,000 | |
| Gross profit percentage on sales | 40% |
What amount of inventory was lost in the flood?
A. $55,000
B. $85,000
C. $120,000
D. $150,000
Related questions
Martinez 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) | $ 81,100 | Sales revenue | $418,600 | ||||
| Purchases | 286,900 | Sales returns | 21,200 | ||||
| Purchase returns | 27,700 | Gross profit % based on net selling price | 38 | % |
Merchandise with a selling price of $30,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $7,500. The company does not carry fire insurance on its inventory.
1. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
Question 31
Corresponds to CLO 7(c) Rupert Hobby's accounting records showthe following for the year ending December 31, 2014: PurchaseDiscountsâ¦$13,400; Freight-inâ¦$12,000; Purchasesâ¦$450,500;Beginning Inventoryâ¦$35,600; Ending Inventoryâ¦$24,200; PurchaseReturnsâ¦$15,000. Using the periodic inventory system, what is thecost of goods sold?
$445,500 | ||
$469,700 | ||
$433,500 | ||
$461,900 |
3 points
Question 32
Corresponds to CLO 7(d) Bay Company sold $100,000 of merchandisein the month of April, 2013. Returns that month totaled $5,000. BayCompany uses the periodic method to determine ending inventory eachDecember 31. For interim financial statements, cost of goods soldis estimated based on the previous year's gross profit rate. If BayCompany's gross profit rate for 2012 was 60%, what is the cost ofgoods sold for the month of April?
$57,000 | ||
$60,000 | ||
$38,000 | ||
$40,000 |
3 points
Question 33
Corresponds to CLO 8(a) We Love Pets, Inc. has the followinginventory data: January 1, beginning inventory of 50 units at $25;January 10, purchases of 70 units at $27; January 25, purchases of40 units at $28. A physical count of inventory on January 31reveals that there are 45 units on hand. Using the FIFO inventorymethod, cost of goods sold for January is
$3,135 | ||
$3,005 | ||
$2,875 | ||
$1,255 |
3 points
Question 34
Corresponds to CLO 8(b) Party Retailers has the followinginventory data: May 1, beginning inventory of 200 units at $10; May14, purchases of 300 units at $12; May 23, purchases of 250 unitsat $15. A physical count of inventory on May 31 reveals that thereare 300 units on hand. Using the LIFO inventory method, endinginventory for May is
$3,000 | ||
$6,150 | ||
$4,350 | ||
$3,200 |
3 points
Question 35
Corresponds to CLO 8(c) Halting Corporation has the followinginventory data: September 1, beginning inventory of 430 units at$11; September 8, purchases of 350 units at $12; September 21,purchases of 460 units at $14. A physical count of inventory onSeptember 30 reveals that there are 400 units on hand. Using theweighted average inventory method, rounding the unit cost to thenearest penny, what is cost of goods sold for September?
$10,357 | ||
$4,960 | ||
$10,416 | ||
$4,932 |
3 points
Question 36
Corresponds to CLO 8(d) Unleash Corporation is a retaileroperating in an industry currently experiencing high inflation.Unleash wants to show the lowest cost of goods sold on its incomestatement in order to show higher profits. Which inventory costingmethod should Unleash use?
FIFO because cost of goods sold represents the earliestcosts. | ||
Average because cost of goods sold will represent an averageamount. | ||
Specific identification because it involves the actualcosts. | ||
LIFO because cost of goods sold represents the latest costs. |
3 points
Question 37
Corresponds to CLO 9(a) The following balance sheet and incomestatement data is available for Gold River Corporation: Currentassetsâ¦$125,000; Total assetsâ¦$520,000; Net incomeâ¦$345,000;Current liabilitiesâ¦$80,000; Total liabilitiesâ¦$150,000;Stockholders' equityâ¦$370,000; Average common shares outstandingâ¦10,000. What is Gold River's current ratio?
3.47 | ||
1.64 | ||
1.56 | ||
0.83 |
3 points
Question 38
Corresponds to CLO 9(b) The following balance sheet data isavailable for Pinpoint Products: Current assetsâ¦$50,000; Property,plant, and equipment,â¦$70,000â¦Other assetsâ¦$10,000; Currentliabilitiesâ¦$30,000; Long-term liabilitiesâ¦$22,000; Stockholders'equityâ¦$78,000; Average common shares outstanding⦠10,000. What isPinpoint's debt to total assets, shown as a percentage?
60% | ||
45% | ||
67% | ||
40% |
3 points
Question 39
Corresponds to CLO 9(c) The following balance sheet and incomestatement data is available for Frame Manufacturing: Totalassetsâ¦$520,000; Total liabilitiesâ¦$250,000; Stockholders'equityâ¦$270,000; Gross profitâ¦$55,000; Net incomeâ¦$40,000; Averagecommon shares outstanding⦠25,000. What is Frame Manufacturing'searnings per share?
$10.80 | ||
$3.50 | ||
$1.60 | ||
$2.20 |
3 points
Question 40
Corresponds to CLO 9(d) The following financial information isavailable for Maroon Corporation: Sales revenueâ¦$200,000; Cost ofgoods soldâ¦$120,000; Operating expensesâ¦$40,000. What is Maroon'sgross profit rate, shown as a percentage?
20% | ||
80% | ||
60% | ||
40% |
