On April 25, 2011, a flash flood destroyed one of Kane Company's warehouses, destroying all of the inventory inside. The company had inventory at other locations which were not affected by the flood. Fortunately for the company, all of the accounting records were kept in the main office inside a building at a different location. A search through the records revealed the following information:
Purchases up to April 25…………………………. $742,500
Cost of inventory on hand January 1…………….. $137,200
Sales up to April 25……………………………….$ 1,028,000
Cost-to-sales ratio for 2011……………………….. 65%
A count of inventory on hand at the other locations revealed that inventory costed at $121,300 was on hand.
Required:
Determine the cost of the inventory that was destroyed in the flash flood.