Bristol Company lost all of its inventory in a fire on December 26, 2017. The accounting records showed the following gross profit data for November and December.

Bristol is fully insured for fire losses but must prepare a report for the insurance company.
Instructions
(a) Compute the gross profit rate for November.
(b) Using the gross profit rate for November, determine the estimated cost of the inventory lost in the fire.

December Net sales Beginning inventory Purchases Purchase returns and allowances Purchase discounts Freight-in Ending inventory November (to 12/26) 700,000 33,000 420,000 14,900 9,500 5,900 600,000 30,000 368,000 13,300 8,500 4,800 33,000