On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available: What is the estimated inventory on July 8 immediately prior to the fire?
A) $192,000.
B) $490,000.
C) $510,000.
D) $280,000.

Question

On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:  What is the estimated inventory on July 8 immediately prior to the fire?
A) $192,000. 
B) $490,000. 
C) $510,000. 
D) $280,000.

Quizplus · Accepted Answer

Beginning inventory plus purchases $770,000
Less: Estimated cost of goods sold ($700,000 × [1 - .30]) 490,000
Estimated ending inventory $280,000

On July 8, a Fire Destroyed the Entire Merchandise Inventory