Lp Heading 1 Heading 2 Heading 3 Heading 4 | 1 Normal h Selec Styles Editing can verify your subscription. Sign In 1 ..2 . .3... .. .. ..5 .. . .6 . ..7 Exercise 4: Gross Profit Method for Estimating Cost of Goods Sold and Ending Inventory (first read pages 466-468) Part A: On September 15, a hurricane destroyed the entire inventory stored in a warehouse owned by Reynolds Importers, Inc. The following information is available from the company's records Beginning inventory Net purchases (January 1 - September 15 Net sales January 1 - September 15) Gross profit percentage in previous years $20,000 $30,000 $40000 40% Estimate the cost of the inventory destroyed by the hurricane using the gross profit method Part B: You are conducting an audit of Weston Company. The company's ledger shows an inventory balance of $600,000. To determine whether this amount is reasonable you use the following information to compute the estimated ending inventory. Is this amount reasonable? Beginning inventory Net purchases Net sales Gross profit percentage in previous years $500,000 $2,000,000 153 000 000 30% Focus o te