Gross Profit Method: Estimation of Flood Loss On November 21, 2016, 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 $8,400. The following information was available from Hodge's accounting records for Product Tex: Inventory at November 1, 2016 Purchases from November 1, 2016, to date of flood $95,000 144,000 Net sales from November 1, 2016, to date of flood 233,000 Based on recent history, Hodge had a gross margin (profit) on Product Tex of 35% 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 Inventory at November 1, 2016 Less: Salvage goods November 21, 2016 Net sales from November 1, 2016, to date of flood Estimated cost of goods sold Purchases from November 1, 2013, to date of flood Less: Estimated gross margin (profit) Purchases from November 1, 2016, to date of flood Net sales from November 1, 2016, to date of flood Net sales from November 1, 2016, to date of flood X X 10000 000