Late on the night of September 30, 2021, an arsonist destroyed the Rainy Day Umbrella Company warehouse, which was full of inventory. Luckily the accounting records were stored in another facility and not destroyed in the fire. Rainy Day Umbrella Company is in the process of filing a claim with its insurance company for the inventory loss due to the fire. Beginning Inventory $350,500 Purchases through September 30, 2021 $470,250 Net sales revenue through September 30, 2021 $745,200 The gross margin percent has historically been 40% of net sales revenue. 

Required: Estimate the value of the inventory destroyed in the fire using the gross margin method

Answer rating: 100% (QA)

Estimating Inventory Destroyed in Fire using Gross Margin Method We can es... View the full answer