Question

On Sep 22, 2018 a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following info is available fro the records of company's periodic inv system. What is the order of accounts?

Answer 1

The question involves calculating the inventory loss in a periodic inventory system after a flood, which is crucial for insurance and financial reporting.

Step-by-step explanation:

The question pertains to the determination of inventory loss due to a flood in a company's warehouse, specifically within the context of a periodic inventory system. In accounting, when reconstructing lost inventory records, the accounts typically follow the order: beginning inventory, added purchases, subtracting ending inventory (if any remained), and accounting for sales to find the cost of goods sold (COGS). However, since the flood destroyed the entire inventory, the ending inventory would be zero. This information is critical for insurance claims and financial reporting purposes.