Dubai Electronics discovered on the morning of March 17, 2020 that a material amount of inventories were stolen. Dubai Electronics and its insurance company need to estimate the dollar value of the stolen goods in order to reach a financial settlement under the existing insurance policy. Dubai Electronics and the Insurance company examined the warehouses & books of Dubai Electronics and found out the following:

- The value of inventory available in the warehouses after the rubbery were $269,000.

- In its balance sheet on Dec. 31, 2019 Dubai Electronics reported inventory value of $560,000.

- Dubai Electronics books show that Purchases since the beginning of 2020 to the date of the burglary were $1,128,000. The insurance company contacted the supplier to verify and the value was confirmed. All purchases were made on FOB destination terms.

- Dubai Electronics books show that sales since the beginning of 2020 till the date of rubbery were $1,980,000.

- Dubai Electronics consistently sells it goods at a gross profit margin of 30%.

Required:

1) Use the gross profit method to estimate the dollar value of stolen merchandize.

2) Assume Dubai Electronics buys some of it merchandize on FOB shipping point terms & that $85,000 worth of merchandize are on transit. Show how that would impact your earlier answer, if any.