Gross Profit Method: Estimation of Flood Loss

On November 21, 2019, a flood at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $9,300. The following information was available from Hodge's accounting records for Product Tex:

Inventory at November 1, 2019		$112,000
Purchases from November 1, 2019, to date of flood		130,000
Net sales from November 1, 2019, to date of flood		238,000

Based on recent history, Hodge had a gross margin (profit) on Product Tex of 25% of net sales.

Required:

1. Prepare a schedule to calculate the estimated loss on the inventory in the flood, using the gross profit method.

HODGE COMPANY
Calculation of Estimated Loss on Inventory in the Flood Using Gross Margin (Profit) Method
November 21, 2019
Inventory at November 1, 2019		$fill in the blank 1bca240a7fe503c_2
Purchases from November 1, 2019, to date of flood		fill in the blank 1bca240a7fe503c_4
Cost of goods available for sale		$fill in the blank 1bca240a7fe503c_6
Estimated cost of goods sold
Net sales from November 1, 2019, to date of flood	$fill in the blank 1bca240a7fe503c_8
Less: Estimated gross margin (profit)	fill in the blank 1bca240a7fe503c_10	fill in the blank 1bca240a7fe503c_11
Estimated cost of inventory at date of flood		$fill in the blank 1bca240a7fe503c_13
Less: Salvage goods		fill in the blank 1bca240a7fe503c_15
Estimated loss on inventory in the flood		$fill in the blank 1bca240a7fe503c_17