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Woods warehouse burned down on April 1 of Year 4. The following information (up to...

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Accounting

Woods warehouse burned down on April 1 of Year 4. The following information (up to the date of the re) was taken from the Year 4 records of the company: inventory, January 1, $60,000 ; gross sales, $320,000 ; purchases, $180,000 ; sales returns (restored to inventory), $10,000 ; purchase returns and allowances, $4,000 ; and freight-in, $16,000. The cost of goods sold and gross prot for the past three years follow.
Year Cost of Goods Sold Gross Profit
Year 1 $1,000,000 $250,000
Year 2920,000240,000
Year 31,000,000240,000
Required
a. Estimate the cost of the inventory destroyed in the re, using the average gross prot percentage for the past three years.
Note: Assume no inventory was salvagable.
Note: Do not use negative signs with any of your answers.
Average gross profit percentage for the past three years COGAS Answer
COGS,
Ending inventory loss Our estimate in part a would be questionable in all of the following cases except for:

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