Question: Teal 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 |
|
$158,100 |
|
Sales revenue |
|
$646,500 |
|
| Purchases for the year |
|
391,500 |
|
Sales returns |
|
22,000 |
|
| Purchase returns |
|
31,100 |
|
Rate of gross profit on net sales |
|
30 |
% |
Merchandise with a selling price of $23,100 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,700 had a net realizable value of $5,500.
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
Amount of loss $