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 compiled: $\begin{array}{lr}\text { Net Sales } & \$ 180,000 \\\text { Purchases } & 106,500 \\\text { Freight-ln } & 4,000\end{array}$ Instructions
Determine the merchandise lost by fire, assuming a beginning inventory of $60,000 and a gross profit rate of 45% on net sales.