Check my work On September 22, 2018, a flood destroyed the entire merchandise in
ID: 2583969 • Letter: C
Question
Check my work On September 22, 2018, 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 company's periodic inventory system Inventory, January 1, 2018 Net purchases, January 1 through September 22 Net sales, January 1 through September 22 Gross profit ratio $140,000 370,000 550,000 25% 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 Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyedExplanation / Answer
Answer:-
Calculation the cost of inventory destroyed in the flood using gross profit method Particluars Amount Amount $ $ Beginning inventory 140000 Add:-Net Purchases 370000 Cost of goods available for sale (a) 510000 Less:- Cost of goods sold (b) 412500 Net Sale 550000 Less:-Estimated Gross profit 25% on sale 137500 Estimated cost of inventory destroyed c=a-b 97500