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On December 31, 2020, the entire inventory of Naren Corp. was destroyed by a flood....

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Accounting

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On December 31, 2020, the entire inventory of Naren Corp. was destroyed by a flood. Sales and purchases for the year had been $2.6 million and $1.2 million, respectively. The beginning inventory (Jan. 1, 2020) was $450,000. In the past, Naren's gross profit has averaged 40%. Naren uses the periodic inventory system. Instructions a. Calculate the estimated cost of inventory destroyed. b. Prepare journal entries at December 31, 2020 to close the sales and related cost of goods sold accounts

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