Rasheed Wallace 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 ..... $170,000
Sales revenue ......... $650,000
Purchases for the year ...... 390,000
Sales returns ......... 24,000
Purchase returns ......... 30,000
Rate of gross profit on net sales .. 40%

Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $15,000 had a net realizable value of $5,300.

Instructions
Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.