A fire completely destroyed all the inventory of Glisan Lu
Question and Solution
A fire completely destroyed all the inventory of Glisan Lumber Yard on August 5, 20--. Fortunately, the accounting records were not destroyed in the fire. The following information is provided by Glisan Lumber Yard for the time period January 1 through August 5: Beginning inventory, January 1, 20-- ..... $100,000 Net purchases, January 1 through August 5 ... 420,000 Net sales, January 1 through August 5 ..... 732,000 Normal gross profit as a percentage of sales .... 40% REQUIRED Estimate the amount of merchandise inventory destroyed in the fire on August 5 using the gross profit method.