Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 33

Use gross profit ratio to calculate inventory loss On April 8, 2016, a flood destroyed the warehouse of Stuco Distributing Co. From the waterlogged records of the company, management was able to determine that the firm's gross profit ratio had averaged 40% for the past several years and that the inventory at the beginning of the year was $157,100. It also was determined that during the year until the date of the flood, sales had totaled $319,200 and purchases totaled $177,570.
Required:
Calculate the amount of inventory loss from the flood.