The Inventory of Willamette Company Was Destroyed by Fire on April

Essay

The inventory of Willamette Company was destroyed by fire on April 1. From an examination of the accounting records the following data for the first three months of the year are obtained: $$\begin{array} { l r } \text { Sales Revenue } & \$ 185,000 \\\text { Sales Returns and Allowances } & 5,000 \\\text { Purchases } & 110,000 \\\text { Freight-In } & 4,000 \\\text { Purchase Returns and Allowances } & 3,500\end{array}$$ Instructions
Determine the merchandise lost by fire assuming a beginning inventory of $50000 and a gross profit rate of 45% on net sales.