gross profit method: estimation of fire loss

Gross Proft Method: Estimation of Fre Loss On January 20, 2017, Shewart Company's records revealed the folowing information Inventory, July 1, 2016 Purchases, July 1, 2016-January 20, 2037 382,100 Sales, July 1, 2016-January 20, 2017 592,000 Purchases returns Purchases discounts taken Freight-in s 55,300 1,500 4,700 thet were salvages from the fre. The salveged goods had entire inventory on January 20, 2017, except for purchases in transit, FOB shipping point of $6,000, and geods having a selling price of ar, estimated salvage value of $2,900 The average gross profe on net sales in previous periods mas 40%. Compute the cost of the inventory lost in the fire. STEWART COMPANY Computation of Cost of Inventory Lost in Fire nventory Juy 1, 2016 Purchases Dess $6,000 in tran Cost of goods available for sake and on hand Schedule 2 Computation of Cost of Inventory Lost in Fire Schedule 1 Inventory, July 1, 2036 Purchases Dess $6,000 in transit) Less: Purchases returms Less: Purchases dscounes taken Freight-I Cost of goods available for sale and on hand Schedule 2 Sales Less: Seles returns Net sales Schedule 3 Cost of goods sok Cost of goods salvaged Schedule 4 Inventory lost in the fire Cost of goods available for sale and on hand Less: Cost of goods solkd Less: Cost of goods salvaged Inventory lost inventory method, R is the ending inventory reported in its interim financial reports which may cause concern about the accuracy of 2. If a company discloses that it uses the the reported amounts