On April 31 2017 KIFOs store room was destroyed by fire. KIFO requires an estimate of the cost of goods lost by fire on April 31. Inventory on hand on January 1 was K342, 000. Purchases since January 1 were K828, 000; freight-in, K30, 600; purchase returns and allowances, K21, 600. Sales are made at 35 % above cost and totaled K1, 080,000 to April 31. Goods costing K98,100 were left undamaged by the fire ; the remaining goods were destroyed.The company had insured its inventory with the Madson insurance company and the company is compiling the insurance claim Required(a) Estimate the cost of goods that were destroyed by fire to be included in the insurance claim. (7 marks)
On April 31 2017 KIFOs store room was destroyed by fire. KIFO requires an estimate of the cost of goods lost by fire on April 31. Inventory on hand on January 1 was K342, 000. Purchases since January 1 were K828, 000; freight-in, K30, 600; purchase returns and allowances, K21, 600. Sales are made at 35 % above cost and totaled K1, 080,000 to April 31. Goods costing K98,100 were left undamaged by the fire ; the remaining goods were destroyed.The company had insured its inventory with the Madson insurance company and the company is compiling the insurance claim Required(a) Estimate the cost of goods that were destroyed by fire to be included in the insurance claim. (7 marks)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On April 31 2017 KIFOs store room was destroyed by fire. KIFO requires an estimate of
the cost of goods lost by fire on April 31. Inventory on hand on January 1 was K342, 000.
Purchases since January 1 were K828, 000; freight-in, K30, 600; purchase returns and
allowances, K21, 600. Sales are made at 35 % above cost and totaled K1, 080,000 to April 31.
Goods costing K98,100 were left undamaged by the fire ; the remaining goods were destroyed.
The company had insured its inventory with the Madson insurance company and the company is
compiling the insurance claim
Required
(a) Estimate the cost of goods that were destroyed by fire to be included in the
insurance claim. (7 marks)
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