4. A fire destroyed most of the inventory of ABC Retailing on August 5, 2020. They...

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4. A fire destroyed most of the inventory of ABC Retailing on August 5, 2020. They were able to save $95,000 worth of inventory because it was stored in a separate building. Accounting records showed beginning inventory and purchases during 2020 totaled $350,000. ABC had a policy of pricing inventory to produce a gross profit rate of 55%, and during 2020 they had sales of $510,000, up to the date of the fire. a. What should the COGS estimate be, based on the gross profit rate? (2 marks) b. How much inventory was lost in the fire? (1 mark) 4. A fire destroyed most of the inventory of ABC Retailing on August 5, 2020. They were able to save $95,000 worth of inventory because it was stored in a separate building. Accounting records showed beginning inventory and purchases during 2020 totaled $350,000. ABC had a policy of pricing inventory to produce a gross profit rate of 55%, and during 2020 they had sales of $510,000, up to the date of the fire. a. What should the COGS estimate be, based on the gross profit rate? (2 marks) b. How much inventory was lost in the fire? (1 mark)