A fire destroyed a company’s detailed stock records and much of the merchandise held in stock. The company accountant was able to discover that stock at the beginning of the period was £40,000, purchases up to the date of the fire were £250,000, and sales up to the date of the fire were £400,000. In past periods, the company has earned a gross profit of 35% of sales.

Required Calculate the cost of the stock destroyed by the fire.

AppendixLO1