E6-26A. (Learning Objective 4: Estimating inventory by the gross profit method) J C Company began May with inventory of $48,500. The business made net purchases of $32,900 and had net sales of $64,000 before a fire destroyed the company’s inventory. For the past several years, J C’s gross profit percentage has been 35%. Estimate the cost of the inventory destroyed by the fire. Identify another reason owners and managers use the gross profit method to estimate inventory.