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Problem - The inventory of Cullumber Company was destroyed by fire on June 1. From an examination of the accounting records, the following data for the first five months of the year were obtained: Sales $98,000; Sales Returns and Allowances $1,500; Sales Discounts $800; Freight Out $2,500; Purchases $51,600; Freight In $2,300; Purchase Returns and Allowances $2,900; and Purchase Discounts $1,300. Determine the inventory lost by fire, assuming a beginning inventory of $25,900 and a gross profit margin of 40%. Inventory lost by fire.
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