On May 17, it was discovered that a material amount of inventory had been stolen. A physical count discloses that $55,000 of merchandise was on hand as of May 17. The following additional data is available from the accounting records:

Records indicate that the company's gross profit has averaged 40 percent of selling prices.
Required:
Estimate the amount of loss due to theft.

Question

On May 17, it was discovered that a material amount of inventory had been stolen. A physical count discloses that $55,000 of merchandise was on hand as of May 17. The following additional data is available from the accounting records:
  
Records indicate that the company's gross profit has averaged 40 percent of selling prices.
Required:
Estimate the amount of loss due to theft.

Quizplus · Accepted Answer

The Answer of On May 17, it was discovered that a material amount of inventory had been stolen. A physical count discloses that $55,000 of merchandise was on hand as of May 17. The following additional data is available from the accounting records:
  
Records indicate that the company's gross profit has averaged 40 percent of selling prices.
Required:
Estimate the amount of loss due to theft.

On May 17, It Was Discovered That a Material Amount