Then after the fight he rolled up random loot.

Where do these people come from?
Michigan, apparently.
1. He didn't have the loot done BEFORE the game? That's just being a lazy DM.
2. Average loot per encounter per APL times the number of encounters = total GP. The DM then buys the items he wants running around in his campaign, then buys non-coin loot, then places the items and loot in appropriate places. This is so you don't have a guy running around with, for example, infinite potions of greater magic fang CL20 at level 3.
ETA: The total average loot for a 4 person party going from level 1 to level 2 should be about 3600 GP.
Roger, would you mind breaking down #2 a little bit more for a dumb guy?
Okay, you set up your encounters. NPCs get equipped out of table 14-9 of the core rule book, this does not count as loot.
Then just make a list of encounters Consult table 12-5, and use the appropriate column (left hand column for fast advancement experience, middle for middle, and right for slow).
Assuming medium, then, each encounter for a 3rd level party should be worth 800GP, assuming the average encounter is appropriate to the characters' levels. Add up the number of encounters and multiply by 800 GP. That's the total loot. Then you go hit the magic item tables and buy the items
you want in your campaign with up to half of that loot. The other half should be 1/4 art work, 1/4 gems, and 1/2 coinage. NOTE: this doesn't have to be spread out evenly. It can be the phat loot after the boss encounter, some might even be "unguarded" (har har har), etc.
Assuming 14 encounters being enough to level a party up (less at 1st level), that means that you have 11,200 GP to hand out between the party making 3rd and making 4th (larger parties are accounted for by adjusting the APL by +1 on the loot charts as well as the encounter tables.) Means:
7000 GP in magic items. Total.
3500 GP in cash.
1750 in art work (jewelry, tapestries, paintings, etc)
1750 in gems
Also, don't just tell them how much art & gems are worth. If nobody took appraise as a skill, then you can just smile at them as they sell the good stuff for pennies on the dollar.
Note that this system relies on the PCs having access to a large enough town for them to purchase level-appropriate magic items. If they aren't, goose up the magic a bit and back off on the gems. But still have part of the treasure be a bigass statue or painting they have to lug around. Because.
ETA: Also remember that cursed items do not count as loot and should be placed according to your hatred of the players and all that is right and good about the world, and that if they don't beat the DC to identify the item by 10 or more, it comes up as a beneficial item.