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On November 21, 2011, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,720. The following information was available from the records of Hodge’s periodic inventory system:233,200 Based on recent history, Hodge’s gross profit ratio on Product Tex is 36% of net sales. Calculate the estimated loss on the inventory from the fire, using the gross profit method.
Question:On November 21, 2011, a fire at Hodge Company’s warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can besold for…
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