Doc Gibbs Company reported the following information for November and December 2010.

Doc Gibbs’s ending inventory at December 31 was destroyed in a fire.

Instructions

(a) Compute the gross profit rate for November.

(b) Using the gross profit rate for November, determine the estimated cost of inventory lost in the fire.

Transcribed Image Text:

November December $ 610,000 120,000 ???? 1,000,000 Cost of goods purchased Inventory, beginning-of-month Inventory, end-of-month Sales $500,000 100,000 120,000 800,000