Salvage Sales Ltd $\quad\$------$ $$\text { (b) Mark-up is } 25 \text { percent on selling price?\quad \$-----}$$

Essay

Salvage Sales Ltd.suffered a loss of some inventory by fire on May 7.Cost of inventory on hand on January 1 was $100,000 and purchases between January 1 and May 7 amounted to $70,000 while freight-in and purchase returns,respectively,amounted to $6,000 and $4,000.Between January 1 and May 7 sales totalled $84,000.Goods which cost $24,500 were undamaged by the fire while the remainder of the inventory was destroyed.What was the approximate cost of the goods destroyed if: (a) Mark-up is 25 percent on cost? $\quad\$------$ $$\text { (b) Mark-up is } 25 \text { percent on selling price?\quad \$-----}$$