A fire on 30 September 2002 destroyed some of a company’s inventory and its inventory records.
The following information is available:
$
Inventory 1 September 2002                                 318,000
Sales for September 2002                                     612,000
Purchases for September 2002                             412,000
Inventory in good condition at 30 September 2002 214,000
Standard gross profit percentage on sales is 25%
Based on this information, what is the value of the inventory lost?
A $96,000
B $271,000
C $26,400
D $57,000

D Sales                                                                     612,000
   Opening inventory                            318,000
   Purchases                                        412,000
                                                            730,000
   less: Inventory held                          214,000
                                                          516,000
Shortfall                                             57,000             459,000
Gross profit 25%                                                       153,000

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