1. Gross Profit Method Castlevania Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following.
Beginning inventory $170,000 Sales $650,000
Purchases for the year 450,000 Sales returns 24,000
Purchase returns 30,000 Rate of gross margin on net sales 30%
Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value of $5,300.Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.