On April 15, 2018, fire damaged the office and warehouse of Headland Corporation. The only accounting record saved was the general ledger, from which the balance sheet data below was prepared.

HEADLAND CORPORATION

MARCH 31, 2018

Cash $19,630

Accounts receivable 36,260

Inventory, December 31, 2017 69,820

Land 35,170

Buildings 119,820

Accumulated depreciation $43,280

Equipment 3,775

Accounts payable 24,684

Other accrued expenses 11,305

Common stock 106,100

Retained earnings 50,460

Sales revenue 124,430

Purchases 50,460

Miscellaneous expense 25,324

$360,259 $360,259

The following data and information have been gathered.

1. The fiscal year of the corporation ends on December 31.

2. An examination of the April bank statement and canceled checks revealed that checks written during the period April 115 totaled $12,320: $5,561 paid to accounts payable as of March 31, $3,715 for April merchandise shipments, and $3,882 paid for other expenses. Deposits during the same period amounted to $12,165, which consisted of receipts on account from customers with the exception of a $1,002 refund from a vendor for merchandise returned in April.

3. Correspondence with suppliers revealed unrecorded obligations at April 15 of $16,670 for April merchandise shipments, including $2,483 for shipments in transit (f.o.b. shipping point) on that date.

4. Customers acknowledged indebtedness of $48,170 at April 15, 2018. It was also estimated that customers owed another $8,070 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $552 will probably be uncollectible.

5. The companies insuring the inventory agreed that the corporations fire-loss claim should be based on the assumption that the overall gross profit rate for the past 2 years was in effect during the current year. The corporations audited financial statements disclosed this information: Year Ended December 31 2017 2016 Net sales $550,590 $394,230 Net purchases 273,750 256,130 Beginning inventory 48,000 69,480 Ending inventory 69,820 48,000

6. Inventory with a cost of $6,550 was salvaged and sold for $3,460. The balance of the inventory was a total loss. Compute the amount of inventory fire loss.