On February 17, 2010, a flood destroyed the work in process inventory and half the raw materials inventory of the LRT Company. There was no damage to the finished goods inventory. A physical inventory taken after the flood indicated the following values:
Raw materials ................. $35,000
Finished goods ............... $79,000
A review of the accounting records indicated the following:
Inventories, December 31, 2009
Raw materials ................. $70,000
Work in process ............... 80,000
Finished goods ................ 72,000
Sales (to February 17) ............. 50,000
Raw materials purchases ............ $20,000
Direct labor cost ................ 30,000
Manufacturing overhead cost ........... 15,000
Gross profit rate (on sales) ............ 40%
Required:Compute the value of the inventory destroyed by the flood.