E9-15B (Gross Profit Method) You are called by the CFO of Dolphin Co. on March 9 and asked to prepare a claim for insurance as a result of a theft that took place the night before.

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E9-15B (Gross Profit Method) You are called by the CFO of Dolphin Co. on March 9 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately. The following data are available.

 

Inventory, March 1                                                         $ 78,000

Purchases—goods placed in stock March 1–9              112,000

Sales—goods delivered to customers (gross)                 91,000

Sales returns—goods returned to stock                             3,000

 

Your client reports that the goods on hand on March 9 cost $24,000, but you determine that this figure includes goods of $7,000 received on a consignment basis. Your past records show that sales are made at approximately 20% over cost. Dolphin’s insurance covers only goods owned.

Instructions

Compute the claim against the insurance company.

    • 11 years ago
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