Question: Gross Profit Method The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $350,000

Gross Profit Method

The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records:

Jan. 1 Inventory $350,000
Jan. 1 - Dec. 31 Purchases (net) 2,950,000
Sales 4,440,000
Estimated gross profit rate 35%

a. Estimate the cost of the inventory destroyed.

Estimated Cost of Merchandise Destroyed
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$fill in the blank bcc71103f03903e_6
$fill in the blank bcc71103f03903e_8
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$fill in the blank bcc71103f03903e_14

b. Which method is used to estimate inventory cost in case of inventory destroyed by fire?

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