On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company's periodic inventory system: Inventory, January 1, 2021 Net purchases, January 1 through September 22 Net sales, January 1 through September 22 Gross profit ratio Required: Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method. Beginning inventory Plus: Net purchases $146,000 376,000 580,000 20% Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyed
On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company's periodic inventory system: Inventory, January 1, 2021 Net purchases, January 1 through September 22 Net sales, January 1 through September 22 Gross profit ratio Required: Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method. Beginning inventory Plus: Net purchases $146,000 376,000 580,000 20% Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory destroyed
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting
Goods Company. The following information is available from the records of the company's periodic inventory system:
Inventory, January 1, 2021
Net purchases, January 1 through September 22
Net sales, January 1 through September 22
Gross profit ratio
Required:
Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method.
Beginning inventory
Plus: Net purchases
$146,000
376,000
580,000
20%
Cost of goods available for sale
Less: Cost of goods sold:
Net sales
Less: Estimated gross profit
Estimated cost of goods sold
Estimated cost of inventory destroyed
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