On January 1, a store had inventory of $48,000. January purchases were $46,000 and January sales were $90,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 25% of cost. Merchandise with a selling price of $7,500 remained undamaged after the fire. Compute a) the estimate of total inventory at cost, and b) the amount of the fire loss, assuming the store had no insurance coverage.

Answer rating: 100% (QA)

Answer Workings A Inventory balance Beginning 1 Jan 48000 B Purchase to da... View the full answer