Fram Company lost 70% of its inventory in a fire on March 25, 2014. The gross profit method. accounting records showed the following gross profit data for February and March.

oe March XLS February (to 3/25)

r= Net sales $300,000 $260,000 Net purchases 197,800 191,000 Freight-in 2,900 4,000 Beginning inventory 4,500 25,200 Ending inventory 25,200 oe es Fram Company is fully insured for fire losses but must prepare a report for the insurance company.

Instructions

(a) Compute the gross profit rate for the month of February.

(b) Using the gross profit rate for February, determine both the estimated total inventory and inventory lost in the fire in March.