On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by...
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Accounting
On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following Information is available from the records of the company's periodic inventory system: beginning inventory, $270,000; purchases and net sales from the beginning of the year through February 26, $500,000 and $700,000, respectively, gross profit ratio, 30% Estimate the cost of the inventory destroyed by the hurricane using the gross profit method. Beginning inventory Plus: Net purchases Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyed
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