Determine the merchandise lost by fire, assuming:

a. A beginning inventory of $20,000 and a gross profit rate of 30% on net sales.

b. A beginning inventory of $30,000 and a gross profit rate of 40% on net sales.

"E6.20 (LO 6), AP The inventory of Hang Company was destroyed by fire on March 1. From an examination of the accounting records, the following data for the first 2 months of the year are obtained: Sales Revenue $51,000, Sales Returns and Allowances $1,000, Purchases $31,200, Freight-In $1,200, and Purchase Returns and Allowances $1,400. Instructions Determine the merchandise lost by fire, assuming: a. A beginning inventory of $20,000 and a gross profit rate of 30% on net sales. b. A beginning inventory of $30,000 and a gross profit rate of 40% on net sales. \begin{tabular}{|r|r|} \hline & \\ \hline (a) & \\ \hline 1 & \\ 2 & Estimated cost of goods sold \\ \hline 3 & \\ 4 & \\ \hline 5 & \\ \hline 6 & \\ \hline 7 & \\ \hline 8 & Estimated cost of merchandise lost \\ \hline 9 & \\ \hline 10 & (b) \\ 11 & \\ 12 & Estimated cost of goods sold \\ \hline 13 & \\ \hline 14 & \\ \hline 15 & \\ \hline 16 & \\ 17 & \\ \hline 18 & Estimated cost of merchandise lost \\ \hline 19 & \end{tabular}