Cougar Corp. requires an estimate of the cost of goods lost by fire on May...
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Accounting
Cougar Corp. requires an estimate of the cost of goods lost by fire on May 15th. Merchandise on hand on January 1 was $41,000. Purchases since January 1 were $112,000. Freight paid on these inventory purchases is $5,100. The company also returned inventory that originally cost $3,400 (the retail price for the returned inventory is $5,800). Sales, which are made at 50% above cost, totaled $213,000 through May 15th. Goods costing $6,900 were left undamaged by the fire (the remaining goods were destroyed). Compute the cost of goods destroyed by the fire using the gross profit inventory method.
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