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 $140,000Net purchases, January 1 through September 22 370,000Net sales, January 1 through September 22 550,000Gross profit ratio 25% Required:Estimate the cost of inventory destroyed in the flood using the gross profit method.

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 $140,000Net purchases, January 1 through September 22 370,000Net sales, January 1 through September 22 550,000Gross profit ratio 25% Required:Estimate the cost of inventory destroyed in the flood using the gross profit method.

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Description: 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

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1CP

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