On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company’s periodic inventory system:

Inventory, January 1, 2021 ........................................$140,000
Net purchases, January 1 through September 22 ...370,000
Net sales, January 1 through September 22 ............550,000
Gross profit ratio ...............................................................25%

Required:
Estimate the cost of inventory destroyed in the flood using the gross profit method.