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: $570,000 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 $160,000 $476,000 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 476,000 X Cost of goods available for sale $570,000 x Less: Cost of goods sold 4,560 X Inventory on hand September 28, 2019, and destroyed by the fire $631,400 x