On May 15, 2016 the Smoky Bear Company inventory storage facility

was completely destroyed in a fire. Offsite accounting records reflect the normal gross profit rate is 45% of sales. Sales to the date of the fire were $1,600,000. The April 30, 2016 inventory value was $550,000. Two purchases were made during May, before the fire, for the values of $500,000 and $700,000. Using the Gross Profit Method determine the estimated inventory loss due to the fire.