A flood destroyed a company's warehouse contents on September 12. The following information was the only information that was salvaged:Inventory, beginning: $28,000 
Purchases for the period: $17,000 
Sales for the period: $55,000 
Sales returns for the period: $700 

The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory using the gross profit method?

A. $44,000.
B. $45,000.
C. $25,995.
D. $29,250.
E. $9,705.


Answer: E

Business

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