Doc Gibbs Company reported the following information for November and December 2008.

Doc Gibbs’s ending inventory at December 31 was destroyed in a fire.

Instructions

(a) Compute the gross profit rate for November.

(b) Using the gross profit rate for November, determine the estimated cost of inventory lost in the fire.

Transcribed Image Text:

November Cost of goods purchased $500,000 Inventory, beginning-of-month 100,000 December $ 610,000 120,000 Inventory, end-of-month 120,000 ???? Sales 800,000 1,000,000