A flood completely destroyed all the inventory of Bayside Waterworks Company on July 1, 20--. Fortunately, the accounting records were not destroyed in the flood. The following information is provided by Bayside Waterworks for the time period January 1 through July 1, 20--.

Beginning inventory, January 1, 20-- .... $ 60,000

Net purchases, January 1 through July 1 ... 380,000

Net sales, January 1 through July 1 ..... 650,000

Normal gross profit as a percentage of sales .. 45%

REQUIRED

Estimate the amount of merchandise inventory destroyed in the flood on July 1 using the gross profit method.