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Monrose Company began May with inventory of $230,000. The business made net purchases of 5625.000 and had net sales of 5915.000 before a fire destroyed the company's inventory. For the past several years. Monrose Company's gross margin on sales has been 37 percent.
Required
Problem 1. Estimate the cost of the inventory destroyed by the fire.
Problem 2. Identify another reason owners and managers use the gross margin method to estimate inventory on a regular basis.
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