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Problem - Assume OMG uses the periodic method of accounting for inventory. A fire destroyed the retail store during June. Only the following information is available from the accounting records. OMG Company had inventory at the beginning of June with a cost of $100,000. During June (before the fire), OMG purchased 500,000 of additional inventory. OMG had sales revenue of $400,000. Historically OMG has had a gross margin (or gross profit) percentage of 40% Use the gross profit method to estimate the amount of inventory OMG lost in the fire. (In other words, calculate what Ending Inventory would have been if not for the fire by using estimated COGS with GM%)
A. 200000
B. 260000
C. 240000
D. 360000
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