Suppose Rocky Mountain, Inc., lost its entire inventory in a hurricane. Beginning inventory was $49,000, net purchases totaled $530,000, and sales came to $880,000. Rocky Mountain’s normal gross profit percentage is 42%. Use the gross profit method to estimate the cost of the inventory lost in the hurricane.

a. $301,000

b. $19,600

c. $68,600

d. $209,400 AppendixLO1