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On April 15, 2015, fire damaged the office and warehouse of Stanislaw Corporation. The only accounting record saved was the general ledger, from which the trial balance below was prepared.
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STANISLAW CORPORATION
TRIAL BALANCE
MARCH 31, 2015
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Cash
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$29,000
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Accounts receivable
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44,500
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Inventory, December 31, 2014
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77,500
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Land
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39,800
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Buildings
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111,100
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Accumulated depreciation
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$43,500
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Equipment
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3,770
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Accounts payable
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32,900
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Other accrued expenses
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15,360
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Common stock
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101,710
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Retained earnings
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61,200
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Sales revenue
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139,300
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Purchases
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61,200
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Miscellaneous expense
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27,100
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$393,970
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$393,970
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The following data and information have been gathered.
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1.
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The fiscal year of the corporation ends on December 31.
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2.
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An examination of the April bank statement and canceled checks revealed that checks written during the period April 1–15 totaled $18,400: $6,410 paid to accounts payable as of March 31, $3,560 for April merchandise shipments, and $4,750 paid for other expenses. Deposits during the same period amounted to $13,600, which consisted of receipts on account from customers with the exception of a $880 refund from a vendor for merchandise returned in April.
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3.
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Correspondence with suppliers revealed unrecorded obligations at April 15 of $23,100 for April merchandise shipments, including $2,980 for shipments in transit (f.o.b. shipping point) on that date.
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4.
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Customers acknowledged indebtedness of $55,600 at April 15, 2015. It was also estimated that customers owed another $8,490 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $730 will probably be uncollectible.
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5.
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The companies insuring the inventory agreed that the corporation’s fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporation’s audited financial statements disclosed this information:
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Year Ended
December 31
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2014
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2013
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Net sales
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$533,100
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$384,800
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Net purchases
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283,000
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242,300
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Beginning inventory
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59,400
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69,300
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Ending inventory
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77,500
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59,400
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6.
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Inventory with a cost of $7,560 was salvaged and sold for $3,850. The balance of the inventory was a total loss.
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Compute the amount of inventory fire loss. (Round ratios for computational purposes to 1 decimal places, e.g 78.5% and final answer to 0 decimal places, e.g. 28,987.)
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Inventory fire loss
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$
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