Problem
Smith Distributors, Inc., supplies ice cream shops with various toppings for making sundaes. On November 17, 2013, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records:
|
Fruit
Toppings
|
Marshmallow
Toppings
|
Chocolate
Toppings
|
|
Inventory, January 1, 2013
|
$
|
27,000
|
|
$
|
7,700
|
|
$
|
3,700
|
|
|
Net purchases through Nov. 17
|
|
185,000
|
|
|
43,000
|
|
|
12,700
|
|
|
Net sales through Nov. 17
|
|
235,000
|
|
|
62,000
|
|
|
20,700
|
|
|
Historical gross profit ratio
|
|
15
|
%
|
|
30
|
%
|
|
30
|
%
|
Required:
1. Calculate the estimated cost of each of the toppings lost in the fire.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.