Concord Corp. lost most of its inventory in a fire in December, just before the year-end physical inventory was taken. The corporations books disclosed the following:

Beginning inventory		$	360,000		Sales		$	1,339,500
Purchases for the year			920,000		Sales returns			49,000
Purchase returns			82,000		Gross margin on sales			40	%

Merchandise with a selling price of $40,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $32,000 had a net realizable value of $11,600.

Part 1

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Calculate the amount lost because of the fire, assuming that the corporation had no insurance coverage.

Loss of inventory due to fire $

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Part 2

Prepare the journal entry to record the loss and account for the damaged inventory in a separate Damaged Inventory account. In the same entry, record cost of goods sold for the year ended December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
SalesLoss From FirePurchases Returns and AllowancesDamaged InventorySales Returns and AllowancesInventoryPurchasesCost of Goods Sold
Cost of Goods SoldPurchases Returns and AllowancesDamaged InventorySalesInventorySales Returns and AllowancesPurchasesLoss From Fire
PurchasesLoss From FireInventoryCost of Goods SoldSalesDamaged InventorySales Returns and AllowancesPurchases Returns and Allowances
InventorySalesCost of Goods SoldPurchases Returns and AllowancesPurchasesSales Returns and AllowancesDamaged InventoryLoss From Fire
InventoryCost of Goods SoldSales Returns and AllowancesSalesDamaged InventoryPurchasesPurchases Returns and AllowancesLoss From Fire
Purchases Returns and AllowancesInventoryCost of Goods SoldSales Returns and AllowancesPurchasesDamaged InventoryLoss From FireSales

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