On September 30, 2020, a fire at Cherimoya Companys warehouse caused severe damage to its entire inventory. Based on recent history, Cherimoya has a gross profit of 30% of net sales. A physical inventory disclosed usable damaged goods which Cherimoya estimates can be sold to a jobber for P50,000. The following information is available from Cherimoyas records for the nine months ended September 30, 2020.

Inventory, January 1 - P550,000 Total purchases received and recorded, Jan. 1 Sept. 30 - P3,000,000 Total freight cost of goods purchased and received - P60,000 Total credit memo received on goods purchased and received - P200,000 Total discounts taken on purchases - P80,000 Invoice received for goods purchased but still in transit shipped Sept. 30, 2020, FOB shipping point -P120,000 Total sales delivered and recorded, Jan. 1 Sept. 30 -P3,600,000 Unrecorded sales invoice for goods delivered -P300,000 Total sales returns accounted and recorded, Jan. 1 Sept. 30 -P160,000 Total sales discounts taken by customers on recorded sales -P40,000

Using the gross profit method, how much is the inventory loss?

Correct answer was P662,000

Please provide a solution on how to arrive to that answer.