Determine cost of inventory lost to make insurance claim

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Reference no: EM131933780

Acme Paper Products had a fire in its warehouse and must determine the cost of the inventory lost to make an insurance claim. The insurance company will accept an estimate based on its historical gross profit percentage as recorded below:

2012 2013 2014 2015 2016

Sales (000) 115.3 126.7 104.8 135.8 137.5

COGS(000) 75.0 82.2 68 88.3 89.4

In 2017, the year of the fire, Acme had beginning inventory of $45,000 and purchases of $75,000. Credit and cash sales were $135,000. Based on these data, estimate the inventory loss.

Reference no: EM131933780

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