On March 15, Stark Company's Inventory Was Destroyed by a Tornado

Multiple Choice

On March 15, Stark Company's inventory was destroyed by a tornado. The following was the only information salvaged: (1) Inventory, January 1: $31,000 (2) Purchases to Mar 15: $14,000 (3) Sales to Mar 15: $65,000 (4) Sales returns to Mar 15: $7,000 Stark's average gross profit ratio is 35%. What is the estimated value of the destroyed inventory?

A) $7,300
B) $8,500
C) $9,250
D) $10,52
E) $45,000