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.

Blue Corporation's April 30 inventory was destroyed by fire. January 1 inventory was $155,000, and purchases for January through April totaled $467,300. Sales revenue for the same period was $684,500. Blue's normal gross profit percentage is 25% on sales. Using the gross profit method, estimate Blue's April 30 inventory that was destroyed by fire. Estimated ending inventory destroyed in fire $

Ayayai Ltd. distributes suitcases to retail stores. At the end of June, Ayayai's inventory consisted of 70 suitcases purchased at $50 each. Ayayai uses a perpetual inventory system. Ayayai has experienced a 5% return rate historically. During the month of July, the following merchandising transactions occurred: July 2Purchased 75 suitcases on account for $70 each from Sandhill Ltd., terms 2/10, n/30. 3Received a $280 credit from Sandhill after returning four suitcases because they were damaged. 6Sold 60 suitcases on account to Satchel World Inc. for $90 each, with an individual cost of $50, terms n/45. 7Issued a $270 credit for three suitcases returned by Satchel World because they were the wrong model. The suitcases were returned to inventory. 9Sold three suitcases-the right model number this time-on account to Satchel World Inc. for $100 each, with an individual cost of $70, terms n/30 11Paid Sandhill the balance owing 13Sold 30 suitcases on account to The Going Concern Limited for…

On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $216,400. Inventory purchased during August was $192,910. Net Sales for the month of August were $544,400. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.