Gross Profit Method The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 Inventory $236,500 Jan. 1 - Dec. 31 Purchases (net) 1,586,000 Sales (net) 2,700,000 Estimated gross profit rate 40% a. Estimate the cost of the inventory destroyed. Estimated Cost of Merchandise Destroyed b. Which method is used to estimate inventory cost in case of inventory destroyed by fire