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1. Gross Profit Method The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records: Jan. 1
1. Gross Profit Method
The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records:
Jan. 1 | Merchandise inventory | $358,375 |
Jan. 1-Dec. 13 | Purchases (net) | 2,399,000 |
Sales (net) | 4,300,000 | |
Estimated gross profit rate | 43% |
Estimate the cost of the merchandise destroyed.
2. Based on the following data, estimate the cost of the ending merchandise inventory:
Sales (net) | $3,400,000 |
Estimated gross profit rate | 40% |
Beginning merchandise inventory | $2,027,000 |
Purchases (net) | 205,000 |
Merchandise available for sale | $2,232,000
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