The total sales for CARM Company up to December 31, 2016 was $1,000,000. Purchases for the month
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Question:
The total sales for CARM Company up to December 31, 2016 was $1,000,000.
Purchases for the month was $900,000, and freight-in of $40,000.
The cost of beginning inventory was $70,000.
The company typically earns a gross profit of 35 percent.
On the night of December 31st, a fire completely destroyed CARM’s inventory.
Required:
Show your working for each of the following:
a. Using the gross profit method, estimate the amount of ending inventory that was destroyed in the fire. (5 points)
Related Book For
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood
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