Castlevania Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following.

Merchandise with a selling price of R$21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of R$15,000 had a net realizable value of R$5,300.
Instructions Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.

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Beginning inventory Purchases for the year Purchase returns R$170,000 450,000 Sales Sales returns 30,000 Rate of gross margin on net sales R$650,000 24,000 30%