Doc Gibbs Company reported the following information for November and
December 2008.
| November | December | |
| Cost of goods purchased | 500,000 | 610,000 |
| Inventory, beginning of month | 100,000 | 120,000 |
| Inventory, end of month | 120,000 | ??? |
| Sales | 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
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