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Bill Phillips owned a small company that sold garden equipment. The equipment was expensive, and a perpetual system was maintained for control purposes. Even so, lost, damaged, and stolen merchandise normally amounted to 5 percent of the inventory balance. On June 14, Phillips warehouse was destroyed by fire. Just prior to the fire, the accounting records contained a $320,000 balance in the Inventory account. However, inventory costing $36,000 had been sold and delivered to customers but had not been recorded in the books at the time of the fire. The fire did not affect the showroom, which contained inventory that cost $62,000.
Required:
Estimate the amount of inventory destroyed by fire.
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