Ryan Company takes a physical inventory at the end of each calendar-year accounting period. Its financial statements for the past few years indicate an average gross margin on net sales of \(30 \%\).

On June 12, a fire destroyed the entire store building and the inventory. The records in a fireproof vault were intact. Through June 11, these records show:

The company was fully covered by insurance and asks you to determine the amount of its claim for loss of merchandise.

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Merchandise inventory, January 1 Merchandise purchases Purchase returns Transportation-in Sales $ 120,000 3,000,000 36,000 204,000 3,720,000