Gross Profit Method: Estimation of Fire Loss On September 28, 2019, a fire destroyed the entire merchandise inventory of Carroll Corporation. The following information is available: Sales, January 1-September 28, 2019 Inventory, January 1, 2019 Merchandise purchases, January 1-September 28, 2019 (including $60,000 of goods in transit on September 28, 2019, shipped FOB shipping point) Markup percentage on cost $550,000 $160,000 $472,000 25% Required: What is the estimated inventory on September 28, 2019, immediately prior to the fire? CARROLL CORPORATION Calculation of estimated inventory on September 28, 2019 (prior to the fire) Beginning inventory 160,000 Purchases on hand 412,000 Cost of goods available for sale 572,000 Less: Cost of goods sold 550,000 X Inventory on hand September 28, 2019, and destroyed by the fire 124,000 X