On November 1 of the current year Wicked Wild Witch Wandas Halloween Shop (4WHS) burned and everything in the store was destroyed. Luckily, Wanda kept the accounting records at home, so the financial data was safe and available for your examination.

Wanda has asked you to prepare an estimate of the dollar amount of the inventory in the store on the night of the fire, so she can file an insurance claim. She provides you with the following information:

1. the stores accounts were closed on the previous Dec. 31

2. Wanda keeps her inventory records on a periodic basis, using the FIFO method, and applying the LCM rule.

3. The store has earned an average of 40% gross profit on net sales for a number of years.

4. The store's accounts on Nov. 1st showed the following balances:

Inventory $ 42,000

Sales $188,000

Sales Returns $ 2,500

Purchases $126,000

Purchase Returns $ 1,200

Freight Costs $ 3,800

REQUIRED:Determine the cost of inventory on hand at the time of the fire $