On July 24, a tornado destroyed Midwest Wholesaler's main warehouse and all its
contents. Company records indicate that at the time of the tornado the net sales
to date were $535,100 and the purchases were $422,900. The beginning inventory,
on January 1, was $319,800. For the past 3 years, the company has maintained
a gross margin of 35%. Use the gross profit method to estimate the inventory loss
for the insurance claim.