Sounds on Wheels sells and installs audio equipment. During a recent fire that occurred at its warehouse, Sounds on Wheels’ entire inventory was destroyed. Sounds on Wheels’ accounting records reflect the following information.
Beginning Inventory........................................................................................ $ 54,000
Net Purchases...................................................................................................... 280,400
Net Sales.............................................................................................................. 425,000
Gross Profit Rate ................................................................................................. 35%

Requirement
1. Use the gross profit method to estimate the amount of Sounds on Wheels’ inventory loss.