On November $21,2024,$ a fire at Hodge Company's warehouse caused severe damage to its entire

inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $$20,000.$ The

following information was available from the records of Hodge's periodic inventory system:

Based on recent history, Hodge's gross profit ratio on Product Tex is $40\%$ of net sales.

Required:

Calculate the estimated loss on the inventory from the fire, using the gross profit method.