Bridgeport 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 |
$178,300 |
Sales revenue |
$607,900 |
| Purchases for the year |
355,000 |
Sales returns |
21,600 |
| Purchase returns |
27,700 |
Rate of gross profit 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 $15,500 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.
Amount of the loss