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On December 5, 2015, a Tornado destroyed the merchandise inventory of Tractor Supply Company. In a concrete floor safe were the company's records with the following information: Tractor Supply Company Trial Balance 30-Sep-15 Cash Accounts Receivable Inventory, December 31, 2014 Equipment Accumulated Depreciation Accounts Payable to Suppliers Other Current Liabilities Common Stock Retained Earnings Sales Sales Returns and Allowances Purchases Purchase Returns and Allowances Sales and Administrative Expenses Other General Expenses 99,577 42,444 99,370 78,500 21,360 29,450 1,477 50,000 85,391 527,925 12,800 332,865 1,675 41,937 9,785 717,278 717,278 Note: The company's 12 month fiscal year ends December 31st. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: 1. Correspondence with suppliers revealed unrecorded obligations at December 5 of $98,777. These unrecorded liabilities pertained to shipments in October totaling $50,467, shipments in November of $41,310, and $5,000 for shipments in transit on December 5 shipped FOB Destination and $2,000 for shipments in transit FOB Shipping Point. 2. Customers of the company have acknowledged indebtedness of $133,675 as of December 5h. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $10,000. Finally, based on past experience, it is estimated that 3.50% of accounts receivable will be uncollectible mber 5, revealed the following: Novembe December 3. Bank statements and the canceled checks enclosed with the statements for October, November and t October Disbursement Activity Payments on Accounts Payable Existing at September 30th Payments for October Inventory Shipments Payments for November Inventory Shipments Payments for December Inventory Shipments Deposit Activity Received on Account From Customers Refund From Vendor For Merchandise Returned on November 30, 2014 4. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information obtained from prior financial statements covering 2014 and 2013: 16,340 13,110 198,701 17,465 8,100 20,750 3,100 800 149,710 18,225 3,175 2,190 For The Years Ended December 31 2014 2013 Sales Sales Returns and Allowances Beginning Inventory Purchases Purchase Returns and Allowances Ending Inventory Required a. Prepare a set of schedules that show the amount of the inventory loss from the flood. b. Do you think the insurance company's approach is fair? lf yes, why? If not, why not? Show supporting calculations. 654,970 6,158 57,569 319,968 1,005 99,370 716,445 4,167 50,345 341,977 875 57,965

On December 5, 2015, a Tomado destroyed the merchandise inventory of Tractor Supply Company. In a concrete floor safe were the company's records with the following information: Tractor Supply Company Trial Balance 30-Sep-15 Cash 99,577 Accounts Receivable 42,444 Inventory, December 31, 2014 99,370 Equipment 78,500 Accumulated Depreciation 21,360 Accounts Payable to Suppliers 29.450 Other Current Liabilities 1.477 Common Stock 50.000 Retained Earnings 85,391 Sales 527,925 Sales Returns and Allowances 12,800 Purchases 332,865 Purchase Returns and Allowances 1.675 Sales and Administrative Expenses 41,937 Other General Expenses 9,785 717,278 717 278 Note: The company's 12 month fiscal year ends December 31st. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: 11. Correspondence with suppliers revealed unrecorded obligations at December 5 of $98.777. These unrecorded liabilities pertained to shipments in October totaling $50,467, shipments in November of $41,310, and $5,000 for shipments in transit on December 5 shipped FOB Destination and $2,000 for shipments in transit FOB Shipping Point 2. Customers of the company have acknowledged indebtedness of $133,675 as of December 5. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $10,000. Finally, based on past experience, it is estimated that 3.50% of accounts receivable will be uncollectible. 13. Bank statements and the canceled checks enclosed with the statements for October, November and through December 5. revealed the following: October Novembe December Disbursement Activity Payments on Accounts Payable Existing at September 30th 16,340 13,110 - Payments for October Inventory Shipments 198,701 17,465 8,100 Payments for November Inventory Shipments 20,750 3,100 Payments for December Inventory Shipments - 800 Deposit Activity Received on Account From Customers 149,710 18,225 3,175 Refund From Vendor For Merchandise Returned on November 30, 2014 2,190 4. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information obtained from prior financial statements covering 2014 and 2013: For The Years Ended December 31 2014 2013 Sales 654,970 716,445 Sales Returns and Allowances 6,158 4.167 Beginning Inventory 57,569 50,345 Purchases 319,968 341,977 Purchase Returns and Allowances 1,005 875 Ending Inventory 99,370 57,965 Required a. Prepare a set of schedules that show the amount of the inventory loss from the flood. b. Do you think the insurance company's approach is fair? If yes, why? If not, why not? Show supporting calculations. On December 5, 2015, a Tomado destroyed the merchandise inventory of Tractor Supply Company. In a concrete floor safe were the company's records with the following information: Tractor Supply Company Trial Balance 30-Sep-15 Cash 99,577 Accounts Receivable 42,444 Inventory, December 31, 2014 99,370 Equipment 78,500 Accumulated Depreciation 21,360 Accounts Payable to Suppliers 29.450 Other Current Liabilities 1.477 Common Stock 50.000 Retained Earnings 85,391 Sales 527,925 Sales Returns and Allowances 12,800 Purchases 332,865 Purchase Returns and Allowances 1.675 Sales and Administrative Expenses 41,937 Other General Expenses 9,785 717,278 717 278 Note: The company's 12 month fiscal year ends December 31st. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: 11. Correspondence with suppliers revealed unrecorded obligations at December 5 of $98.777. These unrecorded liabilities pertained to shipments in October totaling $50,467, shipments in November of $41,310, and $5,000 for shipments in transit on December 5 shipped FOB Destination and $2,000 for shipments in transit FOB Shipping Point 2. Customers of the company have acknowledged indebtedness of $133,675 as of December 5. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $10,000. Finally, based on past experience, it is estimated that 3.50% of accounts receivable will be uncollectible. 13. Bank statements and the canceled checks enclosed with the statements for October, November and through December 5. revealed the following: October Novembe December Disbursement Activity Payments on Accounts Payable Existing at September 30th 16,340 13,110 - Payments for October Inventory Shipments 198,701 17,465 8,100 Payments for November Inventory Shipments 20,750 3,100 Payments for December Inventory Shipments - 800 Deposit Activity Received on Account From Customers 149,710 18,225 3,175 Refund From Vendor For Merchandise Returned on November 30, 2014 2,190 4. The insurance company is proposing a settlement of the company's claim based on the overall gross profit for the most recent two fiscal years. Scheduled below is information obtained from prior financial statements covering 2014 and 2013: For The Years Ended December 31 2014 2013 Sales 654,970 716,445 Sales Returns and Allowances 6,158 4.167 Beginning Inventory 57,569 50,345 Purchases 319,968 341,977 Purchase Returns and Allowances 1,005 875 Ending Inventory 99,370 57,965 Required a. Prepare a set of schedules that show the amount of the inventory loss from the flood. b. Do you think the insurance company's approach is fair? If yes, why? If not, why not? Show supporting calculations

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