Gross Profit Method: Estimation of Fire Loss

On September 28, 2016, a fire destroyed the entire merchandise inventory of Carroll Corporation. The following information is available:

Sales, January 1–September 28, 2016	$560,000
Inventory, January 1, 2016	$150,000
Merchandise purchases, January 1–September 28, 2016 (including $50,000 of goods in transit on September 28, 2016, shipped FOB shipping point)	$476,000
Markup percentage on cost	25%

Required:

What is the estimated inventory on September 28, 2016, immediately prior to the fire?

CARROLL CORPORATION
Calculation of estimated inventory on
September 28, 2016 (prior to the fire)
Beginning inventory	$
Purchases on hand
Cost of goods available for sale	$
Less: Cost of goods sold
Inventory on hand September 28, 2016, and destroyed by the fire	$

Answer rating: 100% (QA)

To calculate the estimated inventory on September 28 2016 immediately prior to the fire we can ... View the full answer