Question: The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records: a. Estimate the cost of the

The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records:

Merchendise inventory Purchases (net) Sales (net) Estimated gross proit rate Jan. 1

a. Estimate the cost of the merchandise destroyed.b. Briefly describe the situations in which the gross profit method isuseful.

Merchendise inventory Purchases (net) Sales (net) Estimated gross proit rate Jan. 1 Jan, 1-Dec. 13 $ 500,000 4280.000 6,500,000 36%

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