Solve the given problem: (Show your complete solution) A mentally deranged employee, Mr. Arson, put a torch to a factory on February 20, 2018. The resulting fire completely destroyed the plant and its contents. Fortunately, certain accounting records were kept in another building. They revealed the following for the period December 31, 2017 to February 20, 2018: Prime cost, P301,000 Gross Profit, P100,000 or 20% of sales Cost of Goods Available for Sale, P460,000 Direct Materials purchased, P170,000 Work in process, December 31, 2017, P34,000 Direct materials, December 31, 2017, P16,000 Finished Goods, December 31, 2017, P30,000
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- The Goodson Company is a chain of retail electronics stores. How much of a loss can Goodson deduct in each of the following cases? Explain. a. An employee drops a 65-inch 3D television, cracking the plastic casing on the back. The television normally sells for 3,300. The cost of the set is 2,400, and Goodson sells the damaged set for 1,500. b. The company replaces its inventory system. The old system cost 45,000 and has a basis of 16,000. The company sells the old system for 7,500. The new system costs 75,000. c. A flood damages one of Goodsons retail stores. The building suffers extensive water damage. The basis of the building is 60,000, and the cost of repairing the damage is 72,000. The insurance company reimburses Goodson 50,000. d. The owner of Goodson sells a complete home entertainment center (e.g., projection TV, DVD, stereo system) to his sister for 7,000. The usual sales price is 8,500. The system costs 6,300. e. Assume the same facts as in part d, except that the owner sells the home entertainment center to his sister for 5,500. f. The owner of Goodson finds that the controller has embezzled 10,000 from the company. Before the owner can confront the controller, the controller leaves town and cannot be found. g. Upon arriving at the companys headquarters, the vice president of sales finds that someone has broken in and stolen three computers. The damage to the outside door is extensive. The cost of repairing the door is 1,500, and the cost of replacing the three computers is 9,500. The original cost of the computers totals 10,500. Goodsons basis in the computers is 5,000. The thieves also stole 350 from the petty cash fund. Goodson files a claim with its insurance company and receives 4,800.You are the cost accountant for Fashions, Inc. On July 31, 2002, a fire destroyed part of your company's office building factory. Inventories were totally destroyed, and many of the accountant records were damaged or destroyed by the fire. You have been given the responsibility for recovering enough cost data to file an insurance claim. You were able to recover the following. Cost of goods available for sale for July amounted to $395,000, sales totaled $625,000, and gross profit sales was 40%. in addition, raw materials used in July amounted to 175,000. and raw materials purchased totaled $172,500. Direct labor cost for July was $125,000. Based on past results, you know that manufacturing overhead is 60% of direct labor cost. You are able to retrieve a copy of the June Balance sheet, and it indicates that inventories of June 30 were as follows: Work in process inventory, $11,000 Finished Goods inventory $18,000 Raw Materials $9,500 You must determine the amount of your…David Patel was at home when he received a call from the fire department telling him his store had burned. His business was a total loss. The insurance company asked him to prove his inventory loss. For the year, until the date of the fire, Patel's company had sales of $450,000 and purchases of $280,000. Freight-in amounted to $13,700, and beginning inventory was $45,000. Patel always priced his goods to achieve a gross margin of 40 percent. Compute patel's estimated inventory loss.
- 4) The Main Company requires an estimate of cost of goods lost in a fire on May 10, 2019. Merchandise on hand on January 1 was $42,000. Purchases since January were $63,000; freight in was $4,800; purchase returns and allowances was $6,000. Sales are made at 2 times cost and sales totaled $100,000 thru May 10, 2018. Goods costing $16,000 were left undamaged by the fire. Please compute the cost of the goods destroyed in the fire.Dylan Engineering Corporation has a contract with Marley Stores to provide customized software for Marley's inventory control system. Cliff Outlets, Inc., Marley's competitor, pays $2,500 to Costello, a Dylan subcontractor, who is writing code for the Marley software, to delay delivery of the code for one week. As a result, Dylan's delivery of the software to Marley is delayed, and Marley sustains $100,000 in lost profits. On what ground could Marley recover damages from Cliff? What would Marley have to prove to win their case? Fully discuss, including explaining what must be proven to establish any legal theories and how such issues are most likely to be resolved in court.The Carlson Department Store suffered heavy damage when a hurricane struck on August 31, 2013. The store was closed for four months (Sept – Dec 2013) and Carlson is now involved in a dispute with its insurance company concerning the amount of lost sales during the time the store was closed. Two key issues must be resolved: The amount of sales Carlson would have made if the hurricane had not struck; and Whether Carlson is entitled to any compensation for excess sales from increased business activity after the storm More than $8 billion in federal disaster relief and insurance money came into the county, resulting in increased sales at department stores and numerous other businesses. The table below shows the sales data for the 48 months preceding the storm. The following table reports total sales for the 48 months preceding the storm for all department stores in the county, as well as the total sales in the county for the four months the Carlson Department Store was closed. Management…
- 35.On September 30, 2020, a fire at Cherimoya Company’s warehouse caused severe damage to its entire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Cherimoya estimates can be sold to a jobber for P50,000. The following information is available from Cherimoya’s records for the nine months ended September 30, 2020.Inventory, Jan. 1 - P550,000Total purchases recorded, Jan. 1 – Sept. 30 (includes P120,000 of goods still in transit, shipped Sept. 29, FOB shipping point) - P3,120,000Freight in - P60,000Purchase returns - P200,000Purchase discounts - P80,000Total sales delivered and recorded, Jan. 1 – Sept. 30 - P3,900,000Sales returns - P160,000Sales discounts - P40,000Using the gross profit method, how much is the inventory loss? a. P602,000 b. P662,000 c. P782,000 d. P832,000An earth quake damaged a warehouse of Kupal Girl Corporation On December 31, 2011. The entire company and many accounting records stored in the warehouse were completely destroyed. Although the inventory was not insured, a portion could be sold for scrap. Though the use of microfilmed records, the following data were gathered: Inventory, January 1, P1,000,000; Purchases, P4,400,000; Cash sales, P547,200; Collection of accounts receivable (including the amount of recovery) P5,040,000; Accounts receivable- January 1; P420,000; Accounts written off, P17,200; Recovery of accounts written off, P7,200; Allowance for bad debts – January 1, P21,000: Account receivable, December 31, 2011, (net of required allowance), P684,000; Sales returns, P72, 000; Sales discounts, P28,800; Purchase returns, P120,000; Purchase discounts, P24,000; freight in, P43,200; Salvage value of inventory, P1,200,000: Gross profit percentage on sales, 32%. The Company consistently measures doubtful accounts in percent…A proper perspective on economics of workplace accidents can be gained by viewing them in the overall context of all accidents. Overall cost of accidents is about 150 million Cedis annually: 1) Wage lost is 20 million Cedis, 2) Medical expenses is 38 million Cedis, 3) Insurance administration is 29 million Cedis, 4) Motor vehicle damage is 27 million Cedis and 5) Fire losses is 15 million Cedis. Against the backdrop:a) Calculate the % wage lost medical expenses, insurance administration, motor vehicle damage and fire lost. b) Comment on the results in question (a). c) Propose a model that facilitates cost analysis in question (b).
- A fire at the factory on 1 October 2018 damaged the machine leaving it with a lower operatingcapacity. The accountant considers that Phoenix Ltd (Phoenix) will need to recognise animpairment loss in relation to this damage. The accountant has ascertained the followinginformation at 1 October 2018:- Phoenix adopts cost model to account for the machine.- The carrying amount of the machine is $60,750.- An equivalent new machine would cost $90,000.- The machine could be sold in its current condition for a gross amount of $45,000.Dismantling costs would amount to $2,000.- In its current condition, the machine could operate for three more years which gives it avalue in use figure of $38,685.1) In accordance with HKAS 36 ‘Impairment of Assets’, which of the following woulddefinitely NOT be an indicator of the potential impairment of an asset (or group ofassets)?A An unexpected fall in the market value of one or more assetsB Adverse changes in the economic performance of one or more assetsC A…Southern Distributors, Incorporated, supplies ice cream shops with various toppings for making sundaes. On November 17, 2024, a fire resulted in the loss of all of the toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following information is available from the company's accounting records: Inventory, January 1, 2024 Net purchases through November 17 Net sales through November 17 Historical gross profit ratio Fruit Toppings Required: 1. Calculate the estimated cost of each of the toppings lost in the fire. Marshmallow Chocolate Fruit Toppings $ 24,000 170,000 220,000 Estimated cost of lost Inventory 20% Marshmallow Toppings $ 7,400 40,000 59,000 30% Chocolate Toppings $3,400 12,400 20,400 30%PLEASE DO ALL REQUIREMENTS WITH WORKING More info 1. On February 1, Braun sold the vehicles to Direct Produce, Inc. for$20,000. 2. On March 31, all of Braun's equipment and machinery was destroyed by a fire in one of its facilities. 3. On May 1, the equipment was replaced at a cost of$570,000and the machinery cost the company$318,400to replace. The estimated useful lives and residual values remained the same as specified for the original machinery and equipment. The company paid cash for the new assets.