Gross Profit Method The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: Jan. 1 $371,750 Jan. 1 - Dec. 31 2,488,000 Inventory Purchases (net) Sales (net) Estimated gross profit rate 4,100,000 38% a. Estimate the cost of the inventory destroyed. Estimated Cost of Merchandise Destroyed Inventory, January 1 371,750 Purchases (net), January 1-December 31 2,488,000 Merchandise available for sale -2,895,750 X Sales, January 1-December 31 4,100,000 Estimated gross profit -1,558,000 Estimated cost of goods sold -2,542,000 Estimated Inventory, December 31 -353,750 x