Estimate the amount of inventory destroyed

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Question - Pristine Thread Co. encountered a fire on March 12 where some of the inventory was destroyed. A physical count of inventory after the fire shows $56,000 still on hand. The company also had beginning inventory on January 1 of $197,000 and the following total amounts for the year up to March 12.

-Sales revenue of $715,000

-Purchases of $503,000

-Freight-in of $41,000Assuming that the inventory has a 34% gross profit on cost, estimate the amount of inventory destroyed using the gross profit method.

Reference no: EM132919476

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