Wineview 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.
Beginning inventory ........ $210,000
Purchases for the year ........ 805,000
Purchase returns ........... 15,000
Sales .............. $970,000
Sales returns ........... 71,000
Rate of gross margin on net sales ... 20%

Merchandise with a selling price of $51,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $25,000 had a net realizable value of $2,500.

Instructions
Compute the amount of the loss as a result of the fire, assuming that the company had no insurance coverage.