Yamachi Inc. incurred a loss from a flash flood on July 20, 2014. The following information was available from the company's accounting records:
All purchases of merchandise are on account. The accounts payable balance on January 1, 2014, was $16,500, and cash paid to suppliers during 2014 to the date of the flood loss was $60,000. Purchase discounts taken during the period were $1,200. The unpaid purchase invoices as of July 20, 2014, totaled $35,050. The accounts payable account is used only to record purchases of merchandise.
Required:
Using the gross profit method, compute the amount of the loss from the flash flood. (Hint: The accounts payable account must be analyzed to determine purchases.)

Question

Yamachi Inc. incurred a loss from a flash flood on July 20, 2014. The following information was available from the company's accounting records:  
All purchases of merchandise are on account. The accounts payable balance on January 1, 2014, was $16,500, and cash paid to suppliers during 2014 to the date of the flood loss was $60,000. Purchase discounts taken during the period were $1,200. The unpaid purchase invoices as of July 20, 2014, totaled $35,050. The accounts payable account is used only to record purchases of merchandise.
Required:
Using the gross profit method, compute the amount of the loss from the flash flood. (Hint: The accounts payable account must be analyzed to determine purchases.)

Quizplus · Accepted Answer

The Answer of Yamachi Inc. incurred a loss from a flash flood on July 20, 2014. The following information was available from the company's accounting records:  
All purchases of merchandise are on account. The accounts payable balance on January 1, 2014, was $16,500, and cash paid to suppliers during 2014 to the date of the flood loss was $60,000. Purchase discounts taken during the period were $1,200. The unpaid purchase invoices as of July 20, 2014, totaled $35,050. The accounts payable account is used only to record purchases of merchandise.
Required:
Using the gross profit method, compute the amount of the loss from the flash flood. (Hint: The accounts payable account must be analyzed to determine purchases.)