The Raider Company had a fire on April 1st, 2020, which completely destroyed its inventory. No physical inventory count had been taken since December 31, 2019. The company's books showed the following balances at the date of the fire:

Net Sales $160,000

Inventory, Dec. 31, 2019 40,000

Net Purchases 130,000

Mark up on cost 25%

Using the gross profit method, determine the cost of inventory destroyed by fire on April 1, 2020

ANS is $42,000