Estimating Inventory Loss Using Gross Profit Method

The accounting records of Butler Company reveal the following information.

Inventory, January $1$ $$32,000$

Purchases from January $1$ to July $19320,000$

Net sales from January $1$ to July $19272,000$

Before the company opened for business on July $20,$ its assets were totally destroyed by flood.

The insurance adjuster found that the average gross profit percentage for the past few years was $37\%.$