(Answered) Problem - estimation of fire loss on january 20 2011 the

Accounting

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.

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