2 AL USULIULS LL LASULLUL UL C TIDUI Sit-ungi Conaut using the lower of cost or market (LCM) rule. On September 22, 2021, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company's periodic inventory system: Inventory, January 1, 2021 $140,000 Net purchases, January 1 through September 22 370,000 Net sales, January 1 through September 22 550,000 Gross profit ratio 25% Required: Estimate the cost of inventory destroyed in the flood using the gross profit method. On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $12,000. The following information was available from the records of Hodge's periodic inventory system: Inventory, November 1 $100,000 Net purchases from November 1, to the date of the fire 140,000 Net sales from November 1, to the date of the fire 220,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 35% of net sales. Required: Calculate the estimated loss on the inventory from the fire, using the gross profit method. PA adapted)