Eastman Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.
| Inventory (beginning) |
|
$ 80,000 |
|
Sales revenue |
|
$415,000 |
|
| Purchases |
|
290,000 |
|
Sales returns |
|
21,000 |
|
| Purchase returns |
|
28,000 |
|
Gross profit % based on net selling price |
|
35 |
% |
Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory.Compute the amount of inventory fire loss. (Do not use the retail inventory method.)