Inventory Loss from Flood
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On March 17, 2006, a flood destroyed the entire inventory of Beat Co. The following information is available from its accounting records:
Inventory, December 31, 2005 $208,000
Purchases, Jan. 1 - Mar. 17 420,000
Sales, Jan. 1 - Mar. 17 600,000
Normal gross margin on sales 40%
Amount of Inventory salvaged from the flood $73,000
Insurance proceeds received to cover the inventory loss $150,000
Compute the amount of inventory loss from the flood.
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