QS 6-12 Estimating inventoriesgross profit method LO6

The inventory of Sixth Avenue Department Store was destroyed by a fire on September 10, 2020. The following 2020 data were found in the accounting records

Jan. 1 inventory ............................................................... $180,000

Jan. 1Sept. 10 purchases (net) ................................. $342,000

Jan. 1Sept.10 sales ..................................................... $675,000

2020 estimated gross profit rate ................................ 42%

QS 6-13 Estimating inventoriesgross profit method LO6

During the past two months, management of Wallace Lake Computing Supplies was closely watching inven-tory levels due to suspected shrinkage caused by unknown factors. The physical count on July 31, the end of the current month, shows $48,000 of merchandise actually on hand. The accounting records for prior periods indicate that gross profit should be 30% of the $565,000 net sales for July. Inventory at June 30 was actually $65,000 and July purchases were $385,500. Calculate the estimated:

a. Ending inventory