Question

On April 24 of the current year, The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory. At the beginning of April, the company reported beginning inventory of $228,750. Inventory purchased during April (until the date of the tornado) was $199,800. Sales for the month of April through April 24 were $644,500. Assuming the company's typical gross profit ratio is 50%, estimate the amount of inventory destroyed in the tornado.

$106,300

$214,275

$322,250

$158,788

$215,950