On February 17, 2007 a flood destroyed the work in process inventory and half the raw materials inventory of the LRT Company. There was no damage to the finished goods inventory. A physical inventory taken after the flood indicated the following values:

Raw materials $35,000 Finished goods $79,000

A review of the accounting records indicated the following:

Inventories, December 31, 2006

Required
Compute the value of the inventory destroyed by theflood.

Transcribed Image Text:

Raw materials Work in process Finished goods $70,000 80,000 72,000 50,000 Raw materials purchases Direct labor cost Manufacturing overhead cost Gross profit rate (on sales) $20,000 30,000 15,000 40% Sales (to February 17)