On November 21, 2018, a fire at Hodge Company's warehouse caused severe damage to its entire inventory

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On November 21, 2018, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The following information was available from the records of Hodge's periodic inventory system:

Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales.

Required:

Calculate the estimated loss on the inventory from the fire, using the gross profit method.

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0078025839

9th edition

Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas

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Posted Date: Dec 12, 2018 01:55 AM

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On November 21, 2018, a fire at Hodge Company's warehouse caused severe damage to its entire inventory

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Gross profit method Gross profit method is used to determine the amoun... View the full answer

Intermediate Accounting

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