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The balance in beginning inventory is $75,000. During the year, the company purchased $200,000 of inventory....

The balance in beginning inventory is $75,000. During the year, the company purchased $200,000 of inventory. Sales during the period were $300,000. The gross profit margin is 20% of sales. On December 31, all unsold inventory was destroyed in a warehouse fire. Calculate the dollar value of the inventory lost in the fire. Prepare the journal entry for $20,000 of inventory purchased on credit.

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Dollar value of Inventory lost in fire $35,000 Sales Gross profit margin Gross profit Cost of Goods sold $300,000 20% $60,000

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