Gross Profit Method In the Early Morning of January 1, 2021, Minnesota Corp.'s

Essay

Gross profit method
In the early morning of January 1, 2021, Minnesota Corp.'s inventory was destroyed by fire. The following information was available for calendar 2020:
Sales........................................$950,000
Net purchases.......................600,000

Begeinning irventory.............110,000 Minnesota's gross profit on sales has averaged 35% for several years.
Instructions
a) Calculate the estimated cost of the inventory destroyed.
b) Prepare entries at December 31, 2020, to close the sales and merchandise accounts.