Lisbon Pottery lost 70% of its inventory in a fire on March 25, 2020. The accounting records showed the following gross profit data for February and March.

Lisbon is fully insured for fire losses but must prepare a report for the insurance company.

Instructions
a. Compute the gross profit rate for the month of February.
b. Using the gross profit rate for February, determine both the estimated total inventory and inventory lost in the fire in March.

Transcribed Image Text:

March (to 3/25) February Net sales Net purchases Freight-in Beginning inventory Ending inventory €260,000 191,000 €300,000 197,800 2,900 4,000 4,500 25,200 ? 25,200