The following information is available for october for barton company: beginning inventory $250,000net purchases 750,000net sales 1,500,000percentage markup on cost 66.67%a fire destroyed barton's october 31 inventory, leaving undamaged inventory with a cost of $15,000. using the gross profit method, the estimated ending inventory destroyed by fire is: a. $85,000.b. $385,000.c. $400,000.d. $500,000.

a. $85,000.

Explanation:

The formula to compute the cost of goods sold is shown below:

Cost of goods sold = Opening inventory + Purchase - ending inventory

Since in the question the cost of goods sold is not given, so first we have to find it.

Let we assume the cost of good sold be X

And, the net sales is $1,500,000 and Percentage markup on cost 66.67%

By this information, we have to make the equation which is shown below:

$1,500,000 = X × (66.67% + 100)

$1,500,000 = 66.67X + 100X

$1,500,000 = 166.67%X

So, X = $1,500,000 ÷ 166.67% = $899,982

The other items values remain the same

Now put these values to the above formula  

So, the value would equal to

$899,982 = $250,000 + $750,000 - ending inventory

So, the ending inventory = $100,018

So, the estimated ending inventory = Ending inventory - undamaged inventory

= $100,018 - $15,000

= $85,018

answer; ///i believe the correct answer is(e) complementary to each other;

yes the correct answer was

b.the increased supply will create a surplus.