A Fire Completely Destroyed the Inventory Housed in a Warehouse

question 93

Multiple Choice

A fire completely destroyed the inventory housed in a warehouse in August.Reconstructed data follows: $\begin{array} { l } \text {Sales to date of fire }&\$340,000\\ \text {Gross margin as a percent of cost }&60\%\\ \text {Gross purchases to date of fire }&200,000\\ \text {Beginning inventory }&30,000\\ \text {Purchases returns and allowances to date of fire}&10,000\\ \text { Freight-in}&4,000\\ \text { Sales returns}&25,000\\\end{array}$
Compute the loss of inventory due to the fire.

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Definitions:

Subscription Price

The cost at which investors can purchase shares during a company's initial public offering (IPO) or when subscribing to a new issue of shares.

Bearish

A term used in trading to describe the expectation that a market, stock or price will decline.

The Spread

The difference between two prices or rates, such as the bid and ask prices in trading or the yield on different securities.