Exercise 9-9 (Algo) Gross profit method [LO9-2] On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $13,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $105,000 141,000 221,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. Estimated loss from fire
Exercise 9-9 (Algo) Gross profit method [LO9-2] On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $13,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $105,000 141,000 221,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. Estimated loss from fire
Chapter1: Financial Statements And Business Decisions
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![Exercise 9-9 (Algo) Gross profit method [LO9-2]
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge
estimates that all usable damaged goods can be sold for $13,000. The following information was available from the records of Hodge's
periodic inventory system:
Inventory, November 1
Net purchases from November 1, to the date of the fire
Net sales from November 1, to the date of the fire
$105,000
141,000
221,000
Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales.
Required:
Calculate the estimated loss on the inventory from the fire, using the gross profit method.
Estimated loss from fire](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05c29da8-5e07-472c-a295-a56e55cdcfad%2F0bf3a9d5-d235-491b-b242-0765e264ecb8%2Fj8dv6nm_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 9-9 (Algo) Gross profit method [LO9-2]
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge
estimates that all usable damaged goods can be sold for $13,000. The following information was available from the records of Hodge's
periodic inventory system:
Inventory, November 1
Net purchases from November 1, to the date of the fire
Net sales from November 1, to the date of the fire
$105,000
141,000
221,000
Based on recent history, Hodge's gross profit ratio on Product Tex is 40% of net sales.
Required:
Calculate the estimated loss on the inventory from the fire, using the gross profit method.
Estimated loss from fire
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