Question: On December 3 1 , 2 0 2 5 , Lucky Company's inventory was completely destroyed by fire. Sales and purchases for the year had

On December 31,2025, Lucky Company's inventory was completely destroyed by fire. Sales and purchases for the year had been $3,000 and $1,960, respectively. The beginning inventory (January 1,2025) was $340; in the past, Lucky's gross profit has averaged 35% of the selling price.
Instruction: compute the estimated cost of inventory burned using the gross profit method (show calculations.)
On December 31,2025, Lucky Company's inventory was completely destroyed by fire.

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