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Question - Franklin Co. has experienced gross profit ratios for 2013, 2012, and 2011 of 34.00%, 29.25%, and 32.25%, respectively. On April 3, 2014, the firm's plant and all of its inventory were destroyed by a tornado.
Accounting records for 2014, which were available because they were stored in a protected vault, showed the following:
Sales from January 1 thru April 2
$146,980
January 1 inventory amount
63,520
Purchases of inventory from January 1 thru April 2
118,723
Required: Calculate the amount of the insurance claim to be filed for the inventory destroyed in the tornado.
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