1) Smith Distribution, Inc. supplies ice cream shops with marshmallow toppings. On November 17, 2019, a fire resulted in a loss of all of the marshmallow toppings stored in one section of the warehouse. The company must provide its insurance company with an estimate of the amount of inventory lost. The following is available from the Companys accounting records:

Inventory 1/1/2019 $ 7,000

Net Purchases through Nov. 17 $ 36,000

Net Sales through Nov. 17 $ 55,000

Historical Gross Profit ratio 30%

Required: Calculate the estimated ending inventory of the marshmallow toppings lost in the fire.

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