Accounting help

Food Grocery Lid. lost most of its inventory in a flood in July, just before its fiscal year-end July 31. The company's books disclosed the following: Beginning inventory $440,000 Sales 1,350,000 Purchases for the year 850,000 Sales returns 50,000 Purchase returns 55,000 Gross profit on net sales 40% Merchandise with a selling price of $42,000 remained undamaged after the flood. After the flood there was also damaged merchandise with an original selling price of $30,000 and a net realizable value of $10,600. Required: (a) Calculate the amount lost because of the flood, assuming that the company had no insurance coverage. (8 marks) (b) How would the loss be classified on the Income Statement of Food Grocery Ltd.? (2 marks)