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P$6-10$A Compute gross profit rate and inventory loss using gross profit method

Suzuki Company lost all of its inventory in a fire on December $26,2015.$ The accounting records showed the following gross fprofit data for November and December.

Net sales

Beginning inventory

Purchases

Purchase returns and allowances

Purchase discounts

Freight$-$in

Ending inventory

November

$$600,000$

$32,000$

$389,000$

$13,300$

$8,500$

$8,800$

$36,000$

December

$($to $\frac{12}{26})$

$$700,000$

$36,000$

$420,000$

$14,900$

$9,500$

$9,900$

$?$

Suzuki 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.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a $"?".$

$($a$)$

Net Sales

November

Cost of goods sold

Beginning inventory

Purchases

Less: Purchase returns and allowar

Purchase discounts

Add: Freight$-$in

Cost of goods available for sale

Ending inventory

Cost of goods sold

Gross profit

$$600,000$

Gross profit rate

Gross profit

Net Sales

Gross profit rate

$\backslash$table$[[,$$$32,000,],[$$$389,000$