5 Points: )A fire destroyed the warehouse of Reed Enterprises, on August 31, 2017. The books and records of Reed showed the following information on that date. Merchandise Inventory. Jan. 1, 2017 Purchases to date Freight- In Sales to date The gross profit ratio has averaged 40% of sales for the past six years. $500,000 $900,000 $30,000 $2,000,000 Required: Use the gross profit method to estimate the cost of inventory destroyed by fire