On November 21, 2016, a fire at Hodge Companys warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $16,000. The following information was available from the records of Hodges periodic inventory system:

Inventory Nov. 1	120000
Net pruchases from Nov 1, to the date of the fire	144000
Net sale from Nov 1, to the date of the fire	224000

Based on recent history, Hodges gross profit ratio on Product Tex is 30% of net sales.

Required:

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

Estimated lost from fire: