value 133 points a warehouse of the Goren Group Inc on May 4

value 1.33 points a warehouse of the Goren Group. Inc, on May 4, 2016. Accounting records on that date inventory, January 1. 2016 Purchases to date Freight-in Sales to date $2,040,000 5,940,000 540,000 9,600,000 The gross profit ratio has averaged 25% of sales for the past four years. Use the gross profit method to estimate the cost of the inventory destroyed in the fire References eBook & Resources Worksheet

Solution

Merchandise inventory January 1, 2016        20,40,000 Add: Purchases        59,40,000 Add: Freight in          5,40,000 Total        85,20,000 Less: Cost of Goods Sales              Sales        96,00,000              Less: Gross Profit @25%       -24,00,000      -72,00,000 Merchandise inventory May 4, 2016        13,20,000