Problem:
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) |
|
$ 84,000 |
|
Sales revenue |
|
$428,400 |
|
| Purchases |
|
370,100 |
|
Sales returns |
|
21,800 |
|
| Purchase returns |
|
29,200 |
|
Gross profit % based on net selling price |
|
34 |
% |
Merchandise with a selling price of $34,600 remained undamaged after the fire, and damaged merchandise has a net realizable value of $9,120. The company does not carry fire insurance on its inventory.
Required:
Question: Compute the amount of inventory fire loss. (Do not use the retail inventory method.)
Note: Please show the work not just the answer.