Problem 1 On July 5, 2018, a fire destroyed the entire inventory of Kinard Music Mart. The following information is available from its accounting records: Inventory, January 1, 2018 Purchases, Jan. 1 July 5 Sales, Jan. 1 July 5 Normal gross margin $211,000 500,000 900,000 30% Required: Compute the estimated cost of inventory lost in the fire. Problem 2 Manila Bread Company uses the average cost retail method to estimate its ending inventories. The following data has been summarized for the year 2018: Cost $ 54,205 326,000 Inventory, January 1 Purchases Net markups Net markdowns Net sales Retail $ 78,000 466,000 8,200 16,700 412,000 Required: Estimate the ending inventory as of December 31, 2018