Master Blaster, Inc., sells and installs audio equipment. Master Blaster, Inc.\'
ID: 2338875 • Letter: M
Question
Master Blaster, Inc., sells and installs audio equipment. Master Blaster, Inc.'s entire inventory was destroyed during a recent fire that occurred at its warehouse. Master Blaster, Inc.'s accounting records reflect the following information. EEB (Click the icon to view the accounting records.) Requirement 1. Use the gross profit method to estimate the amount of Master Blaster, Inc.'s inventory loss Begin by calculating the cost of goods available and then compute the estimated cost of the inventory loss. Data Table Beginning inventory Net purchases Cost of goods available Estimated cost of goods sold $ 63,000 243,900 306,900 Beginning inventory63,000 Net purchases . . ..243,900 Net sales Gross profit rate 404,000 30% Less: Estimated gross profit of 30% Estimated cost of inventory destroyed Print DoneExplanation / Answer
Beginning Inventory
$ 63,000
Net Purchases
$ 243,900
Cost of Goods Available
$ 306,900
Estimated Cost of Goods Sold:
Net sales
404,000
Less: Estimated gross profit of 30%
121,000
Cost of goods sold
$ 283,000
Estimated cost of Inventory Destroyed($ 306,900-$ 283,000)
$ 23,900
Beginning Inventory
$ 63,000
Net Purchases
$ 243,900
Cost of Goods Available
$ 306,900
Estimated Cost of Goods Sold:
Net sales
404,000
Less: Estimated gross profit of 30%
121,000
Cost of goods sold
$ 283,000
Estimated cost of Inventory Destroyed($ 306,900-$ 283,000)
$ 23,900