2020 5,600,000 100,000 6,000,000 Problem 13-8 (AICPA Adapted) On December 31, 2021, a big fire caused severe damage to the warehouse of Claire Company. 2021 Beginning inventory 1,000,000 Purchases 8,000,000 Purchase return 500,000 Sales 9,000,000 At the beginning of 2021, the entity changed the policy on the selling prices of the merchandise in order to produce a gross profit rate of 5% higher than the gross profit rate in 2020. Undamaged merchandise marked to sell at P500,000 was salvaged. Damaged merchandise marked to sell at P100,000 had an estimated realizable value of P10,000. What amount should be reported as inventory fire loss? a. 2,200,000 b. 1,840,000 c. 1,600,000 d. 1,780,000