Question $1$ of $30$

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Flint Hardware lost most of its inventory in an electrical fire that destroyed the company's warehouse and retail store in $2024.$ Fortunately, the accounting records were backed up on the owner's computer in her home office and could, therefore, be recovered. However, Flint uses the periodic inventory system. Therefore, it could not determine the amount of inventory that was lost in the fire because the inventory was destroyed. Flint's insurance company requires Flint to prepare a reasonable estimate of the lost inventory before it can process the insurance claim.

You are Flint's accountant. You review the accounting records for $2023$ and $2024($to the date of the fire$)$ and obtain the following information:

Sales in $2023$ were $$945,000.$

Sales in $2024$ up to the time of the fire amounted to $$665,000.$

Cost of goods sold in $2023$ was $$585,900.$

$2024$ inventory purchased to the date of the fire totalled $$477,000.$

The ending inventory reported on the $2023$ statement of financial position was $$86,400.$

Prepare an estimate of the amount of inventory lost in the fire.

Estimated amount of inventory lost in the fire $