A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2024 Purchases to date Freight-in Sales to date $ 1,910,000 5,810,000 410,000 8,300,000 The gross profit ratio has averaged 25% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2024 Purchases to date Freight-in Sales to date $ 1,910,000 5,810,000 410,000 8,300,000 The gross profit ratio has averaged 25% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on that date indicated the
following:
Merchandise inventory, January 1, 2024
Purchases to date
Freight-in
Sales to date
$ 1,910,000
5,810,000
410,000
8,300,000
The gross profit ratio has averaged 25% of sales for the past four years.
Required:
Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
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