Estimation of Flood Loss On June 30, 2016, a flash flood damaged the warehouse and factory of Padway Corporation, completely destroying the work - in - process inventory. There was no damage to either the raw materials or finished goods inventories. A physical inventory taken after the flood revealed the following valuations: A review of the hooks and records disclosed that the gross profit margin historically approximated 25% of vales. The sales for the first six months of 2016 were $340,000. Raw material purchases were $115,000. Direct labor costs for this period were $80,000, and manufacturing overhead was historically applied at 50% of direct labor. Compute the value of the work in process inventory lost at June 30, 2016. Show supporting computations in good form