Question
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following: Merchandise inventory, January
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following:
Merchandise inventory, January 1, 2016$1,920,000Purchases to date5,820,000Freight-in420,000Sales to date8,400,000
The gross profit ratio has averaged 20% of sales for the past four years.
Required:Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
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Accounting for Non-Accounting Students
Authors: John R. Dyson
8th Edition
273722972, 978-0273722977
