On July 5, 2009, a Fire Destroyed the Entire Inventory

Essay

On July 5, 2009, a fire destroyed the entire inventory of Kinard Music Mart. The following information is available from its accounting records:
Required:
Compute the estimated cost of inventory lost in the fire.
$\begin{array}{lr}\text { Inventory, January 1, 2009 } & \$ 211,000 \\\text { Purchases, Jan. 1 - July } 5 & 500,000 \\\text { Sales, Jan. 1 - July 5 } & 900,000 \\\text { Normal gross margin } & 30 \%\end{array}$