On August 31, a Hurricane Destroyed a Retail Location of Vinny's

question 88

Multiple Choice

On August 31, a hurricane destroyed a retail location of Vinny's Clothier including the entire inventory on hand at the location.The inventory on hand as of June 30 totaled $320,000.From June 30 until the time of the hurricane, the company made purchases of $85,000 and had sales of $250,000.Assuming the rate of gross profit to selling price is 40%, what is the approximate value of the inventory that was destroyed?

• A)$320,000.
• B)$181,500.
• C)$205,000.
• D)$255,000.

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Definitions:

Comparability

A financial accounting principle that enables users to easily evaluate one company's financial statements alongside those of another.

Companies

Business entities formed to engage in commercial, industrial, or professional activities, either for profit or non-profit purposes.

Investment in Bonds

The purchase of bonds with the aim to earn interest income over time and potentially benefit from appreciation in bond value.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position by detailing its assets, liabilities, and equity at a specific point in time.