Swifty Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following.
Beginning inventory $156,000 Sales revenue $621,700
Purchases for the year 380,100 Sales returns 23,800
Purchase returns 30,100 Rate of gross profit on net sales 40%
Merchandise with a selling price of $22,800 remained undamaged after the fire. Damaged merchandise with an original selling price of $16,000 had a net realizable value of $5,200.
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
