Assume that the following was extracted from Massy’s accounting information system for operations at this outlet for the week, up to the time of the fire. Sales $830,...

Assume that the following was extracted from Massy’s accounting information system for operations at this outlet for the week, up to the time of the fire.


Sales $830,00 Purchases Returns $56,000
Purchases $580,000 Beginning Inventory $160,000
Sales Returns $42,000
The company’s gross profit percent based on net selling price is 40%. Merchandise with a selling price of $60,000 remainded undamaged after the fire. Some smoke damaged merchandise has a residual value of $18,200.
The company is in the process of estimating its fire loss on inventory using the gross profit method, for insurance purposes.

Required:
Prepare a detailed schedule to compute the estimated fire loss incurred on inventory