Schedule computing the fire loss incurred


Problem: 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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Accounting Basics: Schedule computing the fire loss incurred
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