Wood's warehouse burned down on April 1 of Year 4. The following information (up to the date of the fire) was taken from the Year 4 records of the company: inventory, January 1, $105,000; gross sales, $560,000; purchases, $315,000; sales returns (restored to inventory), $17,500; purchase returns and allowances, $7,000; and freight-in, $28,000. The cost of goods sold and gross profit for the past three years follow. Year Cost of Goods Sold Gross Profit Year 1 $1,750,000 $437,500 Year 2 1,610,000 420,000 Year 3 1,750,000 420,000 Required a. Estimate the cost of the inventory destroyed in the fire, using the average gross profit percentage for the past three years. Note: Assume no inventory was salvagable. Note: Do not use negative signs with any of your answers. Average gross profit percentage for the past three years: 20 % COGAS $ 112,112 x COGS, estimated $ 112,112 x Ending inventory loss $ 112,112 x b. Our estimate in part a would be questionable in all of the following cases except for: The gross profit percentage for Year 5 is expected to decrease.