R B Company began June with inventory of $45,800. The business made net purchases of $31,900 and

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R B Company began June with inventory of $45,800. The business made net purchases of $31,900 and had net sales of $64,500 before a fire destroyed the company’s inventory. For the past several years, R Bs gross profit percentage has been 45%. Estimate the cost of the inventory destroyed by the fire. Identify another reason owner’s and managers use the gross profit method to estimate inventory.

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Financial accounting

ISBN: 978-0136108863

8th Edition

Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas

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