Question 2 (11 marks) Grouse Mountain Equipment Inc. (GME) sells biking, skiing and hiking equipment to retailers. GME reports under ASPE. After a very successful ski season and just as it was about to commence shipping its goods for the upcoming season, GME lost all of its hiking equipment in a fire in April 2015. The company's insurance policy covers 83% of the "cost" of the inventory, calculated in accordance with GAAP, lost in this fire. The company's records show the following: Sales at retail prices (all on credit; net/30) $615,000 Sales returns at retail price 15,000 Cash collected on accounts 580,000 Inventory, January 1, 2015 150,000 Purchases during 2015 (all on credit; 2/10, net/15) 480,000 Payments to suppliers for purchases 440,000 Freight-in (shipping) costs 44,000 Insurance coverage during shipping 9,000 Customs and duties on purchases 8,000 Interest expense on the purchased inventory 10,000 GME normally realizes a gross profit of 30% on its net sales. It accounts for inventory using a periodic inventory system. Any loss from the fire is deductible for income tax purposes. GME's tax rate is 45%. REQUIRED 1. Calculate the net loss from the fire that should be reported on the income statement