Doc Gibbs Company reported the following information for November and December 2010.
|
Cost of goods purchased |
November |
December |
|
Inventory, beginning of month |
$500,000 |
$ 610,000 |
|
Inventory, end of month |
100,000 |
120,000 |
|
Sales |
120,000 |
???? |
|
800,000 |
1,000,000 |
Doc Gibbs’s ending inventory at December 31 was destroyed in a fire.
Instructions
(a) Compute the gross profit rate for November.
(b) Using the gross profit rate for November, determine the estimated cost of inventory lost in the fire.