The inventory of Lemon Company was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales $51,000, Sales Returns and Allowances $1,000, Purchases $31,200, Freight-in $1,200, and Purchase Returns and Allowances $1,400. Determine the merchandise lost by fire, assuming:
(a) A beginning inventory of $20,000 and a gross profit rate of 30% on net sales.
***I know the formula but I am not sure what to do with sales and purchases returns/allowances and freight-in....Not sure where to add or subtract from for those 3 things***
2007-10-10
12:08:25
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2 answers
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asked by
Anonymous