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Calculate the estimated cost of the inventory destroyed

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Reference no: EM132614791

Question - In the early morning of January 1, 2021, all of Minnesota Corp.'s inventory was destroyed by fire. The following information was available for calendar 2020:

Sales $1,250,000

Net purchases 1,350,000

Beginning inventory 110,000

Minnesota's gross profit on sales has averaged 35.0% for several years.

Instructions -

1. Calculate the estimated cost of the inventory destroyed. Show all details.

2. Prepare necessary entries at December 31, 2020, to record the loss of the inventory.

Reference no: EM132614791

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