Gross Profit Example Tiger Corp. experienced a fire on March 17, 2020 that destroyed the inventory in one of their warehouses. Tiger's insurance carrier requires an estimate of the inventory that was on hand when the fire occurred. The following information is available from Tiger's accounting records through the date of the fire: Beginning Inventory $ 645,000 Net Purchases (including freight) $1,125,000 Net Sales $1,800,000 Based on prior years financial statements, Tiger's gross profit averages 25%. Estimate the cost of the inventory destroyed by the fire using the gross profit method. NT 8