Adjusters frequently are required to use their inventive faculties, in ascertaining the loss in country stores, when, after a fire, it is found that all books, papers, invoices, etc., have been destroyed. In such cases the following formula will be of assistance:

First Method

Debits

Capital Invested

--------- $Present indebtedness.....................

Ascertained gross profits..................

Credits

Cash on hand at time of fire $----------Investments other than merchandise........................

Expenses paid..................

Bills and accounts receivable.............

Total.............................. $-------------The balance between the accounts gives the amount of merchandise on hand at the time of the fire, from which the value of the goods saved should be deducted to ascertain the amount of the loss.

Second Method

Debits

Total purchases, per invoice............... $-------------Produce, etc., per ledger accounts.........-------------Cash purchases agreed upon (no vouchers)-------------Capital invested..........................

Present indebtedness.....................

Ascertained gross profits..................

$-----------------CREDITS.

Cash on hand at time of fire.... Investments other than merchandise ........................

Expenses paid..................

Bills and accounts receivable... Total....................

$----$----------------------The balance between the accounts gives the amount of merchandise on hand at the time of the fire, from which the value of the goods saved should be deducted to ascertain the amount of the loss.

Second Method

Debits

Total purchases, per invoice...............

Produce, etc., per ledger accounts.........

Cash purchases agreed upon (no vouchers) $----------------------CREDITS.

Total debits as above..................... $-------------Less capital invested........... $----------Less present indebtedness......----------The remainder represents cash from sales applied to purchases; to this add:

Investments ................... $----------Expenses ...................... ----------Cash on hand.................. ----------Bills receivable................. ----------Book accounts receivable....... ----------- -------------The sum of these credits will represent the cash sales, which are reduced by the per cent of profit to cost basis in the usual manner, and the stock on hand at time of fire is readily ascertained.