Solved: Calculate the estimated loss on the inventory from the fire, Accounting Basics

Calculate the estimated loss on the inventory from the fire

On November 21, 2011, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The following information was available from the records of Hodge's periodic inventory system:

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Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales.

Required:

Calculate the estimated loss on the inventory from the fire, using the gross profit method.

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Accounting Basics: Calculate the estimated loss on the inventory from the fire

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Accounting Basics: Calculate the estimated loss on the inventory from the fire

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