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Reagan Manufacturing began operations five years ago On August 13 2013 a fire broke out in the warehouse destroying all inventory and many accounting records relating to the inventory

Reagan Manufacturing began operations five years ago. On August 13, 2013, a fire broke out in the warehouse destroying all inventory and many accounting records relating to the inventory. The information available is presented below. All sales and purchases are on account. _____________________________________________January 1, 2013………..August 13, 2013 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$124,800 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . ………152,640……………………$148,520 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . ………..91,320………………………105,600 Collection on accounts receivable, January 1-August 13 . . . . . . . ……………………….797,300 Payments to suppliers, January 1-August 13 . . . . . . . . . . . . . . . …………………………463,800 Goods out on consignment at August 13, at cost . . . . . . . . . . . . ……………………………29,300 Summary of previous years’ sales: _________________________________________________2010…………2011…………2012 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …$842,000………$765,000…..$820,000 Gross profit on sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . .336,800………..290,700……344,400 Instructions: Determine the inventory loss suffered as a result of the fire. View Solution:

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