Question :

Franklin co. has experienced gross profit ratios for 2019, 2018 and 2017 of 33.00%, 30.50% and 31.75% respectively. On April 3, 2020, the firm's plant and all its inventory were destroyed by a tornado. Accounting records for 2020 which were available because they were stored in a protected vault showed the following:

Sales from January 1 through April 2 = $145.580

January inventory amount = 63.930

Purchases if inventory from January1 through April 2 = 118.422.

Calculate the amount of the insurance claim to be filed for the inventory destroyed in the tornado. Hint: use the cost of goods sold model and a gross profit ratio that will result in the largest claim. Do not round intermediate calculations.