。
I wondered where she had dropped her wallet.
Literal
She [topic-は] where [at-で] wallet [object-を] dropped [I-wonder-のだろう] [quotative-と] thought.
落とす here is the everyday verb for losing a small belonging by dropping it — wallets, keys, phones. Pairing it with embedded のだろう ('I wonder, probably') and と思った ('I thought') gives the layered 'I was wondering where she'd dropped...' structure. Lost wallets in Japan have an unusually high recovery rate, with bento-shop and station staff routinely turning them in to police boxes (交番) — an everyday cultural quirk.