Bristol Company lost all of its inventory in a fire on December 26, 2014. The inventory loss using gross accounting records showed the following gross profit data for November and December.

profit method. December

(LO 8) November (to 12/26)

| XLS Net sales $600,000 $700,000 Beginning inventory 30,000 33,000 F ict Purchases 368,000 420,000 Purchase returns and allowances 13,300 14,900 Purchase discounts 8,500 9,500 Freight-in 4,800 5,900 Ending inventory 33,000 2 Bristol 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 the fire.