On September 22 2018 a flood destroyed the entire merchandis

On September 22, 2018, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company’s periodic inventory system: Inventory, January 1, 2018 $ 142,000 Net purchases, January 1 through September 22 372,000 Net sales, January 1 through September 22 560,000 Gross profit ratio 30 % Required: Complete the below table to estimate the cost of inventory destroyed in the flood using the gross profit method.

Solution

estimate the cost of inventory destroyed in the flood using the gross profit method.

Estimate cost of inventory destroyed = $6722000