The Accountant for a Company Whose Inventory Was Destroyed by Fire

question 14

Multiple Choice

The accountant for a company whose inventory was destroyed by fire determined from undamaged records that the cost of goods available for sale was $100,000 and the net sales were $80,000 up to the date of the fire.The accountant also determined that the company's normal gross profit rate is 40 percent of net sales.From this data,the accountant estimated the cost of the inventory destroyed by the fire to be

• A) $60,000.
• B) $52,000.
• C) $32,000.
• D) $20,000.

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Definitions:

Continuous Random Variable

A continuous random variable is a variable that can take an infinite number of values within a given range, representing quantities that can be measured, not just counted.

Probability Density Function

A function that describes the relative likelihood for a continuous random variable to occur at a given point in the observation space.

Continuous Random Variable

A type of random variable that can take an infinite number of values within a given range, often measured to any degree of precision.

Weekly Income

The amount of money someone earns in one week from all sources of employment or investments.