On july 8 a fire destroyed the entire merchandise inventory, Ask an Expert

Accounting

On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:

Sales, Jan 1 - July 8 $700,000
Inventory, Jan 1 130,000
Purchases, Jan 1 - July 8 640,000
Gross profit ratio 30%

What is the estimated inventory on July 8 immediately prior to the fire?

A. $192,000

B. $490,000

C. $510,000

D. $280,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M971193

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