2. Inventory Cost Estimation method (Gross Profit Method): XYZ company had the following information during the month of January, 2009: Beginning Inventory $140,000 Purchases $500,000 Purchases returns and allowances $50,000. Purchases Discount $60,000 Transportation Out $20,000 Transportation in $40,000 Sales $600,000; Sales returns and allowances $10,000 and Sales discount was $15,000, while sales commission was 10% of gross sales. Over the past 5 years, the company had experienced an average gross profit percentage of 40%. Unfortunately, one of the employees engaged in some activities that caused fire that destroyed most of the merchandise inventory remaining on hand at the end of the period. The company wanted to make insurance claim but was required to provide an estimate of the inventory lost in the fire. As the accountant of the company, please provide the estimate with supporting calculations.