L5 Products Company began April with inventory of $46,500

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L5 Products Company began April with inventory of $46,500. The business made net purchases of $61,500 and had net sales of $104,600 before a fire destroyed the company’s inventory. For the past several years, L5 Products’ gross profit percentage has been 40%. Estimate the cost of the inventory destroyed by the fire. Identify another reason that owners and managers use the gross profit method to estimate inventory.