On September 22, 2018, a flood destroyed some merchandise inventory in a warehouse owned by...
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Accounting
On September 22, 2018, a flood destroyed some merchandise inventory in a warehouse owned by the Rocklin Sporting Goods Company. Only $100,000 inventory survived the flood. The following information is available from the records of the companys periodic inventory system:
Inventory, January 1, 2018 $240,000
Net purchase, January through September 22 570,000
Net sales, January 1 through September 22 600,000
Gross profit ratio 30%
Required: Estimate the cost of inventory destroyed in the flood using the gross profit method.
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