Liquidator Lounges' Showroom Was Flooded and Its Inventory Was Totally

question 14

Multiple Choice

Liquidator Lounges' showroom was flooded and its inventory was totally destroyed.Its accounting records were damaged but the following information was salvaged.
Sales revenue (to date this period) $380 000
Beginning inventory (at retail) $90 000
Purchases (to date this period at retail) $400 000
Historical gross profit percentage 60%
Assuming the historical gross profit ratio is maintained the estimated cost of inventory lost in the flood is:

• A)$110 000.
• B)$66 000.
• C)$490 000.
• D)$90 000.

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