QUESTION 2 Reena Corp. lost most of its inventory in a fire in...
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QUESTION Reena Corp. lost most of its inventory in a fire in December, just before the yearend physical inventory was taken. The corporation's books disclosed the following: Merchandise with a selling price of $ remained undamaged after the fire. Damaged merchandise with an original selling price of $ had a net realizable value of $ Instructions a Calculate the amount lost because of the fire, assuming that the corporation had no insurance coverage. b Prepare the journal entry to record the loss and account for the damaged inventory in a separate Damaged Inventory account. In the same entry, record cost of goods sold for the year ended December c How would the loss be classified on the income statement of Reena? d An icon reads, Digging Deeper. While the gross profit percentage has averaged over the past five years, it has been as high as and as low as Given this information, should a range of possible loss amounts be provided instead of a single figure? Explain. 
QUESTION
Reena Corp. lost most of its inventory in a fire in December, just before the yearend physical inventory was taken. The corporation's books disclosed the following:
Merchandise with a selling price of $ remained undamaged after the fire. Damaged merchandise with an original selling price of $ had a net realizable value of $
Instructions
a Calculate the amount lost because of the fire, assuming that the corporation had no insurance coverage.
b Prepare the journal entry to record the loss and account for the damaged inventory in a separate Damaged Inventory account. In the same entry, record cost of goods sold for the year ended December
c How would the loss be classified on the income statement of Reena?
d An icon reads, Digging Deeper. While the gross profit percentage has averaged over the past five years, it has been as high as and as low as Given this information,
should a range of possible loss amounts be provided instead of a single figure? Explain.
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