You really should not be handling this client.

But if you start with (example) $20,000 beginning of year inventory, add $30,000 of purchases you have $50,000 goods available for sale.  At the end of the year you have -0- in inventory you have a $50,000 costs of goods sold.  If the selling price of the inventory was $10,000 your gross profit is $10,000 - $50,000 = <$40,000>.  you've reported the loss.

Alternatively, you can leave sales and costs of sales out of the entire equation for the sale of the business and only use it for normal day-to-day operations.  On Form 4797 under ordinary gains and losses you can report the $10,000 sale of inventory and $50,000 cost of inventory for a $40,000 loss.  

Both methods yield you the same result.  But since you have to report on Form 8594 the breakdown, the 4797 method will match the 8594.