Sadler Computer Supply Company has just been destroyed by fire. Fortunately, however, the computerized accounting records had been “backed up” and were in a remote computer location so that the records were not destroyed. The company does not use the retail method of accounting, so although beginning inventory at cost, purchases at cost, purchases returns and allowances, freight in, sales, sales returns and allowances, and other accounting information is available, the retail method of estimating inventory destroyed cannot be used.
What suggestion can you give for determining the estimated cost of the inventory destroyed? What information is needed, and where would this information be found?