On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a...
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Accounting
On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the companys periodic inventory system:
Inventory, January 1, 2021
$
156,000
Net purchases, January 1 through September 22
386,000
Net sales, January 1 through September 22
630,000
Gross profit ratio
20
%
Required: Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method
Beginning inventory
Plus: Net purchases
Cost of goods available for sale
0
Less: Cost of goods sold:
Net sales
Less: Estimated gross profit
Estimated cost of goods sold
0
Estimated cost of inventory destroyed
$0
.
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