Problem 5: Gross Profit Method (10 Points) Design Depot lost most of its inventory in a fire in November just before the year-end physical inventory was taken. The Company records disclose the following: Merchandise with a selling price of $84,500 remained undamaged after the fire, and damaged merchandise has a salvage value of $32,500. The company does not carry fire insurance on its inventory. Instructions Prepare a formal labeled schedule computing the fire loss incurred. (Do not use the retail inventory method.)