Question

Sounds on Wheels sells and installs audio equipment. During a recent fire that occurred at its warehouse, Sounds on Wheels’ entire inventory was destroyed. Sounds on Wheels’ accounting records reflect the following information.
Beginning Inventory........................................................................................ $ 54,000
Net Purchases...................................................................................................... 280,400
Net Sales.............................................................................................................. 425,000
Gross Profit Rate ................................................................................................. 35%

Requirement
1. Use the gross profit method to estimate the amount of Sounds on Wheels’ inventory loss.



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  • CreatedApril 29, 2014
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