hen Mary Potts arrived at her store on the morning of January 29, she found empty shelves and display racks; thieves had broken in uring the night and stolen the entire inventory. Accounting records showed that Potts had inventory costing $55,000 on January 1. om January 1 to January 28, Potts had made net sales of $77,000 and net purchases of $88,000. The gross profit during the past veral years had consistently averaged 43 percent of net sales. Potts plans to file an insurance claim for the theft loss. Using the gross profit method, estimate the cost of inventory at the time of the theft.

hen Mary Potts arrived at her store on the morning of January 29, she found empty shelves and display racks; thieves had broken in uring the night and stolen the entire inventory. Accounting records showed that Potts had inventory costing $55,000 on January 1. om January 1 to January 28, Potts had made net sales of $77,000 and net purchases of $88,000. The gross profit during the past veral years had consistently averaged 43 percent of net sales. Potts plans to file an insurance claim for the theft loss. Using the gross profit method, estimate the cost of inventory at the time of the theft.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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