Eastman Company lost most of its inventory in a fire in Decem- ber just before the year-end physical inventory was taken. Corporate records disclose the following.

Inventory (beginning) Purchases

Purchase returns

$ 80,000 290,000 28,000

Sales revenue

Sales returns

Gross profit % based on

net selling price

$415,000 21,000

35%

Merchandise with a selling price of $30,000 remained undamaged after the fire, and damaged merchan- dise has a net realizable value of $8,150. The company does not carry fire insurance on its inventory.

Instructions

Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)