Why would a company use the gross profit method to estimate ending$$ inventory? $($Select all that$$ apply.$)$

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Part $1$

A$.$

It is common to estimate its ending inventory using the gross profit method when inventory is damaged and an estimated value must be used to file insurance claims.

B$.$

When auditors are testing the overall reasonableness of inventory amounts reported by clients.

C$.$

If monthly or quarterly financial statements have to be prepared but the cost of a full physical inventory several times per year would be prohibitive.

D$.$

In many cases inventory estimates are used in a first pass valuation for a potential acquirer in a merger deal.

E$.$

When annual audited financial statements have to be prepared but the management decides they do not want to perform a physical inventory.