Bottitta Company lost all of its inventory in a fire on December 26, 2012. The accounting records showed the following gross profit data for November and December.

Bottitta is fully insured for fire losses but must prepare a report for the insurance company.Instructions(a) Compute the gross profit rate for November.(b) Using the gross profit rate for November, determine the estimated cost of the inventory lost in thefire.

Transcribed Image Text:

December (to 12/26) November Net sales Beginning inventory Purchases Purchase returns and allowances Purchase discounts Freight-in Ending inventory $700,000 $600,000 36,000 424,000 14,900 377,000 13,300 8,500 8,800 36,000 9,500 9,900