Question: Wildhorse Company lost most of its inventory in a fire in December just before the year-end physical invenory was taken. The corporation's books disclosed the following:
Beginning Inventory: 166,700
Purchases for the Year: 426,700
Purchase Returns: 27,000
Sales Revenue: 667,200
Sales Returns: 25,200
Rate of Gross Profit on Net Sales: 40%
Merchandise with a selling price of $23,100 remained undamaged after the fire. Damaged merchandise with an orignal selling price of $13,900 had a net realizable value of $5,800.
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.