Tim Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $39,920. Purchases since January 1 were $93,780; freight-in, $5,000; purchase returns and allowances, $2,700. Sales are made at 33 ¹/₃% above cost and totaled $124,800 to March 9. Goods costing $10,730 were left undamaged by the fire; remaining goods were destroyed.

1.) Compute the cost of goods destroyed.

2.) Compute the cost of goods destroyed, assuming that the gross profit is 33 ¹/₃% of sales.