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On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the
On February 26, a hurricane destroyed the entire inventory stored in a warehouse owned by the Rockford Corporation. The following information is available from the records of the companys periodic inventory system: beginning inventory, $245,000; purchases and net sales from the beginning of the year through February 26, $450,000 and $650,000, respectively; gross profit ratio, 30%. The cost of inventory destroyed by the hurricane using the gross profit method would be:
a.$240,000.
b.$500,000.
c.$45,000.
d.$360,000.
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