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.) Problem 6: Nonmonetary Exchanges (30 Points) BMA wishes to exchange a medical machine used in its hospital. BMA has received the following offers form the other hospitals: 1. BHPL offered to exchange a similar machine plus $37,500. (The exchange has commercial substance for both parties.) 2. KHMH offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.) 3. St. Luke offered to exchange a similar machine but wanted $2,500 in addition to BMA's machine. (The exchange has commercial substance for both parties.) Instructions For each of the three independent situations, prepare the journal entries to record the exchange on the books of each hospital