On March 17, 2009, a Flood Destroyed the Entire Inventory

Essay

On March 17, 2009, a flood destroyed the entire inventory of Beatty Co. The following information is available from its accounting records:
Required: Compute the estimated cost of inventory lost in the flood.
$\begin{array}{lr}\text { Inventory, January 1, 2009 } & \$ 208,000 \\\text { Purchases, Jan. 1 - Mar. 17 } & 420,000 \\\text { Sales, Jan. 1 - Mar. 17 } & 600,000 \\\text { Normal gross margin } & 40 \%\end{array}$