December 31, 2010 Brown Company’s inventory burned. Sales and

On
December 31, 2010 Brown Company’s inventory burned. Sales and purchases
for the year had been $1,400,000 and $980,000, respectively. The
beginning inventory (Jan. 1, 2010) was $170,000; in the past Brown’s
gross profit has averaged 40% of selling price. Instructions Compute the
estimated cost of inventory burned, and give entries as of December 31,
2010 to close merchandise accounts.