Question 4

Acco Canada , a manufacturer of office supplies, wants to estimate inventory destroyed by flood. Its average gross profit percentage is 40%. The following information is available:

(1) Beginning inventory:

$122,350

(2) Purchases:

$530,850

(3) Purchases returns and allowances:

$5,000

(4) Transportation-in:

$9,725

(5) Sales:

$900,000

(6) Sales returns and allowances:

$10,000

Calculate the value of the destroyed ending inventory using the gross profit method. Round numbers to the nearest dollar, if necessary.

Answer: