typing please. no handwriting

On December 5, 2019, a hurricane destroyed the merchandise inventory of the Key West Music Company. In a waterproof secure safe were the company's records with the following information: Key West Music Company Irial Balance September 30, 2019 Debit Credit Cash $315,325 Accounts Receivable. 36,888 Inventory, December 31, 2018 129,226 Equipment. 200,775 Accumulated Depreciation $ 32,670 Accounts Payable to Suppliers. 31,908 Other Current Liabilities. 2,000 Common Stock. 60,000 Retained Earnings. 41,482 Sales. 1, 246, 624 Sales Returns and Allowances 17,900 Purchases. 546,930 Purchase Returns and Allowances. 3,582 Sales and Administrative Expenses. 50,657 Other General Expenses 120,565 $1, 418, 266 $1,418,266 Note: The Company's 12 month fiscal year ends December 31st. Through correspondence with suppliers, customers, the bank, etc. the following additional information has also been collected: 1. Correspondence with suppliers revealed unrecorded obligations at December 5th of $120,734. These unrecorded liabilities pertained to shipments in October totaling $58, 365, shipments in November of $50, 635, and $10,000 for shipments still in transit on December 5th shipped FOB Destination, and also $1,734 for shipments still in transit FOB Shipping Point. 2. Customers of the company have acknowledged indebtedness of $94,950 as of December 5th. Based on no responses from several other customers, the company estimated that customers, who have not responded, owe approximately $12, 650. Finally, based on past experience, it is estimated that 2.25% of accounts receivable will be uncollectible. 3. Bank statements and the canceled checks enclosed with the statements for October, November and through December 5th, revealed the following: October November December Disbursement Activity Payments on Accounts Payable Existing at September Both $19, 650 $12, 258 C Payments for October Inventory Shipments 21,460 10,695 Payments fon November Inventory Shipments 25,870 4, 732 Payments for December Inventory Shipments 12,635 Deposit Activity Received on Account From Customers 18, 125 14, 330 2,224 Refund from Vendor For Merchandise Returned on August 31, 2019 3, 950* *This refund was delayed until December 2, 2019 because the supplier had lost the claim submitted by Key West Music Company. 4. The insurance company is proposing a settlement of the company's claim based on the overali gross profit for the most recent two fiscal years. scheduled below is information obtained from prior financial statements covering 2018 and 2017: For The Years Ended December 31st 2018 2017 Sales $ 671 108 $709, 335 Sales Returns and Allowances 5761 6,985 Beginning Inventory 575 69 50, 345 Purchases 919 968 341, 977 Purchase Returns and Allowances 285 916 Ending Inventory 129226 57, 569 Required a. Determine the amount of inventory loss from the hurricane. b. Do you feel the insurance company's approach is fair? Explain in detail with supporting calculations