Question - A company's warehouse contents were destroyed by a flood on September 12. The following information was the only information that was salvaged:
1. Inventory, beginning: $28,000
2. Purchases for the period: $17,000
3. Sales for the period: $55,000
4. Sales returns for the period: $700
The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory?