Higgs Company lost most of its inventory in a fire in November just before the year end physical inventory was taken. Corporate records disclose the following: Inventory (beginning) Sales Purchases 186,000 863,000 667,000 64,000 46,000 Sales returns Purchase returns Gross profit based on net selling price is 25%. Merchandise with a selling price of $65,000 remained undamaged after the fire, and damaged merchandise has a salvage value of $26,400. The company does not carry fire insurance on its inventory. Instructions: Prepare a formal labeled schedule computing the fire loss incurred using the gross profit method of estimating inventory