The Byrne Company had its entire inventory destroyed when a fire swept through the company's warehouse on April 30, Year 2. Fortunately, the accounting records were locked in a fireproof safe and were not damaged. The following information for the period up to the date of the fire was taken from the accounting records: Sales$275,000Purchases190,000Beginning inventory22,500Required: Assuming that the gross margin has averaged 35%, what is the estimated value of the inventory destroyed in the fire?
What will be an ideal response?
$33,750 
Inventory lost is computed by plugging the missing figure: $212,500 ? $178,750 = $33,750
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