The inventory of Faraz Traders was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained:

Sales $51,000, Freight-in $1,200, Sales returns and allowances $1,000, Purchase discount $500, Purchases $31,200, Sales discount $750, Freight-out $1,900 and Purchase returns and allowances $1,400.

Assuming that beginning inventory was $20,000 and gross profit rate is 40% on net sales, the estimated cost of inventory lost is: (select 1)

• A. $20,950
• B. $20,500
• C. $20,850
• D. $20,690
• E. $20,700
• F. $20,800
• G. $20,590
• H. $20,490