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 1September 28, 2019	$560,000
Inventory, January 1, 2019	$160,000
Merchandise purchases, January 1September 28, 2019 (including $70,000 of goods in transit on September 28, 2019, shipped FOB shipping point)	$476,000
Markup percentage on cost	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)
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