A fire completely destroyed the entire inventory of Printing Delight Company on April 10, 2014. Fortunately, the books were not destroyed in the fire. The following information is taken from the books of Printing Delight Company for January 1 to April 10 of 2014.
Beginning inventory on Jan. 1 $ 45,000
Net purchases from 1/1 to 4/10 252,000
Net sales from 1/1 to 4/10 378,000
Normal gross profit percentage 37%
Estimate the amount of merchandise destroyed in the fire using the gross profit method:© BrainMass Inc. brainmass.com July 16, 2018, 2:31 pm ad1c9bdddf
To determine the amount of merchandise destroyed we will use the following formula:
Beginning inventory + Net ...
The solution depends on the method used to determine the selling price of the goods.