Ethan runs a clothing store. On 30 June 2020 a fire destroyed his warehouse including all of his inventory and his purchases records. His accounts to 31 December 2019 show that at that date he had inventory of 62400 and he owed his suppliers 65300. He knows that his sales for the first 6 months of 2020 were 750000 and he operates a strict policy of making a gross profit margin of 50%. His file of unpaid invoices was not in the warehouse and shows that he currently owes his suppliers 74000 and from checking his bank statements he knows that he has paid his suppliers 550000 for goods and 20000 for carriage inwards so far in 2020.

1. What was the value of the stock destroyed by the fire? (12 Marks)
2. Ethan does not have an insurance policy that covers the inventory destroyed. How should he account for the destroyed goods? (3 Marks)

TOTAL = 15 Marks