Question: Auto Audio sells and installs audio equipment. During a recent fire that occurred at its warehouse, Auto Audios entire inventory was destroyed. Auto Audios accounting

Auto Audio sells and installs audio equipment. During a recent fire that occurred at its warehouse, Auto Audio’s entire inventory was destroyed. Auto Audio’s accounting records reflect the following information.
Beginning Inventory........................ $ 60,000
Net Purchases................................. 255,000
Net Sales......................................... 440,000
Gross Profit Rate ............................ 40%

Requirement
1. Use the gross profit method to estimate the amount of Auto Audio’s inventory loss.

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