Gross Profit Method
an Inventory Taken the Morning After a Large

Essay

Gross profit method
An inventory taken the morning after a large theft (March 12) discloses $27,500 of goods on hand. The following additional data is available from the books:
Imventory on hend, March 1 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\$ 42,000$
Purchases received, Mareh 1-11 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 36,000
5alez (Eoods delivered to customer-) $\quad 67,500$ Past records indicate that sales are made at 50% above cost.
Instructions
Estimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss. Show appropriate titles for all amounts in your presentation.