Question: Determining the cost of merchandise inventory destroyed in a fire A fire completely destroyed the warehouse of Murphy Electronics Company on the night of May 12 of the current year. The accounting records of the company and $1,890.00 of merchandise inventory were salvaged. The company does not maintain a perpetual inventory system. The insurance company therefore has requested an estimate of the merchandise inventory destroyed in the fire. Forms are given in the Working Papers. The following income statement is for the previous fiscal year.
