Question - Pina 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) $ 79,600
Sales revenue $409,400
Purchases 295,600
Sales returns 21,300
Purchase returns 27,600
Gross profit % based on net selling price 38%
Merchandise with a selling price of $30,200 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,200. The company does not carry fire insurance on its inventory.
Compute the amount of inventory fire loss. (Do not use the retail inventory method.)