Question 5 (4 MARKS) Fire totally destroyed Young's inventory on October 11, 2015. In order to claim fire insurance, Young needs to derive the amount of inventory loss in the fire. Young uses the periodic inventory system in his business and hence, the gross profit method of estimating inventory would be most appropriate to estimate the losses. In the past, Young has always aimed and maintained a gross profit margin of 40%. On the date of the fire, the accountant has managed to save the ledger with the following balances. Merchandise inventory, January 1 $ 260,000 Purchase return and allowance, until Oct 11 12,000 Purchase discount 600 Freight-in cost 1,000 Purchases until Oct 11 1,912,600 Net sales, Jan 1 - Oct 11 3,200,000 Required: Estimate the amount of inventory loss based on the gross profit method. END