1. Gross Profit Method

The merchandise inventory was destroyed by fire on December 13. The following data were obtained from the accounting records:

Jan. 1	Merchandise inventory	$358,375
Jan. 1-Dec. 13	Purchases (net)	2,399,000
	Sales (net)	4,300,000
	Estimated gross profit rate	43%

Estimate the cost of the merchandise destroyed.

2. Based on the following data, estimate the cost of the ending merchandise inventory:

Sales (net)	$3,400,000
Estimated gross profit rate	40%
Beginning merchandise inventory	$2,027,000
Purchases (net)	205,000
Merchandise available for sale	$2,232,000