A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016

A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following:

Merchandise inventory, January 1, 2016$1,920,000   Purchases to date 5,820,000   Freight-in 420,000   Sales to date 8,400,000

The gross profit ratio has averaged 20% of sales for the past four years.

Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.

Here’s the SOLUTION

This entry was posted in Homework Help. Bookmark the permalink.

Comments are closed.