Gross Profit Method A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. T following information is provided by Bayside Waterworks for the time period January 1 through July 1, 20--: Beginning inventory, January 1, 20-- $60,000 Net purchases, January 1 through July 1 380,000 Net sales, January 1 through July 1 650,000 Normal gross profit as a percentage of sales 45% Required: Estimate the amount of merchandise inventory destroyed in the flood on July 1 using the gross profit method.
Gross Profit Method A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. T following information is provided by Bayside Waterworks for the time period January 1 through July 1, 20--: Beginning inventory, January 1, 20-- $60,000 Net purchases, January 1 through July 1 380,000 Net sales, January 1 through July 1 650,000 Normal gross profit as a percentage of sales 45% Required: Estimate the amount of merchandise inventory destroyed in the flood on July 1 using the gross profit method.
Chapter1: Financial Statements And Business Decisions
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![Gross Profit Method
A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. The
following information is provided by Bayside Waterworks for the time period January 1 through July 1, 20--:
Beginning inventory, January 1, 20--
$60,000
Net purchases, January 1 through July 1
380,000
Net sales, January 1 through July 1
650,000
Normal gross profit as a percentage of sales
45%
Required:
Estimate the amount of merchandise inventory destroyed in the flood on July 1 using the gross profit method.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8552db52-4a7d-476b-bba8-cd0aea4e0726%2F7e7ea762-b1ca-4682-81d6-2e80703d5759%2Fb3qf95j4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Gross Profit Method
A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. The
following information is provided by Bayside Waterworks for the time period January 1 through July 1, 20--:
Beginning inventory, January 1, 20--
$60,000
Net purchases, January 1 through July 1
380,000
Net sales, January 1 through July 1
650,000
Normal gross profit as a percentage of sales
45%
Required:
Estimate the amount of merchandise inventory destroyed in the flood on July 1 using the gross profit method.
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