Problem - Estimated of Fire Loss: on January 20, 2014 records revealed the following:
Inventory, July 1, 2013 $52,600
Purchases, July 1, 2013 - January 29, 2014 $368,000
Sales, July 1, 2013 - January 29, 2014 $583,000
Purchases returns $11,200
Purchases discounts taken $5,800
Freight-in $3,800
Sales returns $6,600
A fire destroyed the entire inventory on January 20, 2014, except for purchases in transit, FOB shipping point of $6,000, and goods have a selling price of $4,700 that were salvaged from the fire. The salvaged goods had an estimated salvage value of $2,900. The average gross profit on net sales in previous periods was 40%.
1. Calculate cost of goods available for sale and on hand.
2. Calculate COGS.
3. Calculate Cost of Goods Salvaged.
4. Compute the cost of the inventory lost in the fire.