Question

Westor Company lost all of its inventory in a fire on December 28, 2021. The accounting records showed the following gross profit data for November and December: November December (to Dec. 28) Sales $674,000 $965,390 Sales Returns and Allowances 14,000 26,600 Purchases 441,190 621,660 Purchase returns and allowances 17,550 22,575 Freight in 6,860 12,300 Beginning inventory 34,050 39,405 Ending inventory 39,405 ? Westor is fully insured for fire losses but must prepare a report for the insurance company.

Your answer is correct. Calculate gross profit for the month of November. Gross profit $ SHOW SOLUTION LINK TO TEXT

Your answer is incorrect. Try again. Calculate the gross profit margin percentage for November. (Round gross profit margin to 1 decimal place, e.g. 52.7%.) Gross profit margin $

Your answer is incorrect. Try again. Determine the amount of inventory lost by Westor Company as a result of the fire using the gross profit method. (Round gross profit margin to 1 decimal place, e.g. 52.7% and final answer to 0 decimal places, e.g. 5,275.) Inventory lost by Westor $

Answer 1

	November
Sales	$674,000
Less: Sales returns and allowances	($14,000)
Net Sales	$660,000
Beginning Inventory	$34,050
Add: Net purchases ($441,190 - $17,550)	$423,640
Add: Freight-in	$6,860
Total goods available for sale	$464,550
Less: Ending inventory	($39,405)
Cost of goods sold	$425,145
Net sales	$660,000
Less: Cost of goods sold	($425,145)
Gross Profit	$234,855
Therefore, gross profit for November is $234,855.
Gross Progit Margin ($234,855/$660,000*100)	35.6%
	December
Sales	$965,390
Less: Sales returns and allowances	($26,600)
Net Sales	$938,790
Gross Profit in December ($938,790*35.6%)	$334,060
Net Sales	$938,790
Less: Gross profit	($334,060)
Cost of goods sold in December	$604,730
Beginning Inventory	$39,405
Add: Net purchases ($621,660 - $22,575)	$599,085
Add: Freight-in	$12,300
Total goods available for sale	$650,790
Less: Cost of goods sold	($604,730)
Ending inventory in December	$46,060

Therefore, inventory lost by Westor is $46,060.