Compute the gross profit rate for November

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Question - Lily Company lost all of its inventory in a fire on December 26, 2022. The accounting records showed the following inventory-related data for November and December.

a) Compute the gross profit rate for November.

b) Using the gross profit rate for November, determine the estimated cost of the inventory lost in the fire.

 

November

December
(to 12/26)

Net sales

$520,000

$630,000

Beginning inventory

33,000

37,000

Purchases

381,000

423,000

Purchase returns and allowances

13,500

14,800

Purchase discounts

8,500

9,500

Freight-in

9,000

10,000

Ending inventory

37,000

?

Reference no: EM133157668

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