Problem 9-6

Sweet Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclose the following.

Inventory (beginning)		$ 81,100		Sales revenue		$408,700
Purchases		285,300		Sales returns		20,700
Purchase returns		27,500		Gross profit % based on net selling price		33	%

Merchandise with a selling price of $29,500 remained undamaged after the fire, and damaged merchandise has a net realizable value of $8,300. The company does not carry fire insurance on its inventory. Compute the amount of inventory fire loss. (Do not use the retail inventory method.)

Inventory fire loss

$