A Company's Warehouse Was Destroyed by a Tornado on March

Multiple Choice

A company's warehouse was destroyed by a tornado on March 15. The following information was salvaged from the ruins: Inventory, beginning: $28,000
Purchases for the period: $17,000
Sales for the period: $55,000
Sales returns for the period: $700
The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory?

A) $9,705
B) $25,995
C) $29,250
D) $44,000
E) $45,000