Yamachi Inc. incurred a loss from a flash flood on July 20, 2020. The following information was available from the company's accounting records:

Gross profit: Markup on cost		20%
Beginning inventory, 1/1/20		$18,000
Sales, 1/1/18-7/20/20		85,000
Sales returns		2,500
Cost of goods not destroyed		3,500

All purchases of merchandise are on account. The accounts payable balance on January 1, 2020, was $16,500, and cash paid to suppliers during 2020 to the date of the flood loss was $60,000. Purchase discounts taken during the period were $1,200. The unpaid purchase invoices as of July 20, 2020, totaled $35,050. The accounts payable account is used only to record purchases of merchandise.

Required:

Using the gross profit method, compute the amount of the loss from the flash flood. (Hint: The accounts payable account must be analyzed to determine purchases.)

Yamachi Inc. Computation of the amount of the Flood Loss

Beginning inventoryCost of goods available for saleCost of goods soldEstimated ending inventoryFlood loss	$- Select -
Cost of goods available for saleCost of goods soldEstimated ending inventoryFlood lossPurchases	- Select -
Cost of goods available for saleCost of goods not destroyedEstimated ending inventoryFlood lossPurchases discounts	- Select -
Beginning inventoryCost of goods available for saleCost of goods not destroyedEstimated ending inventoryFlood loss	$- Select -
Beginning inventoryCost of goods soldCost of goods not destroyedEstimated ending inventoryPurchases returned	- Select -
Beginning inventoryCost of goods not destroyedEstimated ending inventoryPurchases returnedPurchases discounts	$- Select -
Add: Cost of goods not destroyedAdd: Purchases discountsAdd: Purchases returnedLess: Cost of goods not destroyedLess: Purchases discounts	- Select -
Cost of goods available for saleCost of goods not destroyedEstimated ending inventoryFlood lossPurchases returned	$- Select -