Problem - "Estimation of Fire Loss: On January 20, 2011, the records of the Stewart Company revealed the following information:
Inventory, July 1, 2010: $53,600
Purchases, July 1, 2010 - January 20, 2011: $368,000
Sales, July 1, 2010 - January 20, 2011: $583,000
Purchases Returns: $11,200
Purchases Discounts Taken: $5,800
Freight-In: $3,800
Sales Returns: $6,600
A fire destroyed the inventory on January 20, 2011 except for purchases in transit, FOB shipping point of $6,000, and goods having a selling price of $4,700 that were salvaged from the fire. The salvaged goods had an estimated salvage value of $2,900. The average gross profit on net sales in previous periods was 40%.
Required: Compute the cost of the inventory lost in the fire.