On November 15, a fire destroyed Youngstown Inc.s warehouse where inventory is stored. It is estimated that $48,000 can be realized from sale of usable but damaged inventory. The accounting records concerning inventory reveal the following. Gross profit averaged 35% of net sales. Inventory at Nov. 1 $576,000 Purchases from Nov. 1 to Nov. 15 672,000 Net sales from Nov. 1 to Nov. 15 960,000 Required

a. Calculate the estimated loss of inventory using the gross profit method.

b. Assume instead that the markup is 25% of cost. Estimate the loss of inventory using the gross profit method.