Question: Gross profit method The inventory was destroyed by fire on December 3 1 . The following data were obtained from the accounting records: Jan. 1

Gross profit method
The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records:
Jan. 1
Jan. 1- Dec. 31
Inventory
Purchases (net)
Sales
Estimated gross profit rate
$350,000
2,950,000
4,440,000
35%
a. Estimate the cost of the inventory destroyed.
Estimated Cost of Merchandise Destroyed
b. Which method is used to estimate inventory cost in case of inventory destroyed by fire?
Gross profit method The inventory was destroyed by fire on December

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