Estimate the dollar amount of inventory

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Question - Kellog Corporation recently experienced a fire which destroyed all of its inventory. The following data have been reconstructed from partial accounting information, and pertain to the year up to the date of the fire.

Beginning inventory $20,000

Net purchases $45,000

Sales $80,000

Gross profit rate 40%

Required - Using the gross profit method, estimate the dollar amount of inventory which was destroyed in the fire.

Reference no: EM132483312

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