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: Fruit Toppings Marshmallow Toppings Chocolate Toppings Inventory, January 1, 2024 $ 20,000 $ 7,000 $ 3,000 Net purchases through November 17 150,000 36,000 12,000 Net sales through November 17 200,000 55,000 20,000 Historical gross profit ratio 20% 30% 35% Required: 1. Calculate the estimated cost of each of the toppings lost in the fire
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: Fruit Toppings Marshmallow Toppings Chocolate Toppings Inventory, January 1, 2024 $ 20,000 $ 7,000 $ 3,000 Net purchases through November 17 150,000 36,000 12,000 Net sales through November 17 200,000 55,000 20,000 Historical gross profit ratio 20% 30% 35% Required: 1. Calculate the estimated cost of each of the toppings lost in the fire
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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:
| Fruit Toppings | Marshmallow Toppings | Chocolate Toppings | |
|---|---|---|---|
| Inventory, January 1, 2024 | $ 20,000 | $ 7,000 | $ 3,000 |
| Net purchases through November 17 | 150,000 | 36,000 | 12,000 |
| Net sales through November 17 | 200,000 | 55,000 | 20,000 |
| Historical gross profit ratio | 20% | 30% | 35% |
Required:
1. Calculate the estimated cost of each of the toppings lost in the fire.
Transcribed Image Text:1. Calculate the estimated cost of each of the toppings lost in the fire.
Estimated cost of
Toppings
lost inventory
Fruit
Marshmallow
Chocolate
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