Seinerfeld Company had its merchandise inventory warehouse destroyed by a fire.Thankfully,the owner had the accounting records at home to prepare financial statements after counting the inventory earlier in the day.The company used the periodic inventory system.In the shock of being notified of the fire,the owner spilled his dinner on the income statement he had just completed.However,the following information was readable: Sales,$200,000; Beginning Inventory,$20,000; Purchases,$130,000; Total Operating Expenses (not including taxes),$40,000; and Profit Before Taxes,$20,000.There were no sales returns,purchases returns,sales discounts nor purchases discounts.Compute the amount of the ending inventory on hand before the fire.

Question

Quizplus · Accepted Answer

Ending Inventory = Beginning Inventory + Purchases - Cost of Goods SoldCost of Goods Sold = Sales - Gross ProfitGross Profit = Sales - Total Operating ExpensesTotal Operating Expenses = $40,000Sales = $200,000Gross Profit = $200,000 - $40,000 = $160,000Cost of Goods Sold = $200,000 - $160,000 = $40,000Ending Inventory = $20,000 + $130,000 - $40,000 = $110,000

Seinerfeld Company Had Its Merchandise Inventory Warehouse Destroyed by a Fire.Thankfully,the