Suzuki Company lost all of its inventory in a fire on December 26, 2015. The accounting records showed the following gross profit data for November and December.
|
November
|
December (to 12/16)
|
|
Net Sales
|
$600,972
|
$704,600
|
|
Begining Inventory
|
$32,800
|
$36,300
|
|
Purchases
|
$387,400
|
$423,700
|
|
Purchase return and allowances
|
$13,400
|
$14,800
|
|
Purchase discounts
|
$8,700
|
$9,800
|
|
Freight-in
|
$9,000
|
$9,500
|
|
Ending Inventory
|
$36,300
|
?
|
Suzuki is fully insured for fire losses but must prepare a report for the insurance company.
1.Compute the gross profit rate for November. (Round answer to 1 decimal place, e.g. 25.5%.)
2. Using the gross profit rate for November, determine the estimated cost of the inventory lost in the fire. (Round answer to 0 decimal places, e.g. 125.)