Adler Company reported the following information for November and December 2014.

estimate inventory.

(LO 8) November December Cost of goods purchased $500,000 $ 610,000 Inventory, beginning-of-month 100,000 120,000 Inventory, end-of-month 120,000 22???

Sales revenue 750,000 1,000,000 Adler’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.