Chapter $5$: Practice for Points $($i$)$

$5$

Exercise $5-14$A $($Algo$)$ Estimating ending inventory LO $5-4$

A substantial portion of inventory owned by Prentiss Sporting Goods was recently destroyed when the roollapsed during a rainstorm. Prentiss also lost some of its accounting records. Prentiss must estimate the loss from the storm for insurance reporting and financial statement purposes. Prentiss uses the periodic inventory system. The following accounting information was recovered from the damaged records:

Beginning inventory

Surchases to date of stc

The value of undamaged inventory counted was $$99,880.$ Historically, Prentiss's gross margin percentage has been approximately $20$ percent of sales.

Required

Estimate the following:

a$.$ Gross margin in dollars.

b$.$ Cost of goods sold in dollars.

c$.$ Ending inventory

d$.$ Amount of lost inventory.

a$.$ Gross margin

b$.$ Cost of goods sold

c$.$ Estimated ending inventory

Inventory lost