Olympic Village Enterprises lost its entire inventory in a hurricane that occurred on July 31,2010. Over the past five years, gross profit has averaged 30% of net sales. The company’s records reveal the following data for the month of July:

Requirements 1. Estimate the July 31 inventory, using the gross profit method.
2. Prepare the July income statement through gross profit for Olympic Village Enterprises.

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Beginning Inventory. Net Purchases. Sales. Sales Returns and Allowances. Sales Discounts $ 37,100 294,600 540,100 72,200 8,300