Paco Company lost most of its inventory in a fire in December just before the...
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Accounting
Paco 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 | $409,800 | ||||
| Purchases | 284,900 | Sales returns | 20,900 | ||||
| Purchase returns | 28,000 | Gross profit % based on net selling price | 35 | % |
Merchandise with a selling price of $29,600 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,000. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
| Inventory fire loss | $ |
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