Belle Equipment Co. wants to prepare interim financial statements for the first quarter of 2014. The company uses a periodic inventory system but would like to avoid making a physical count of inventory. During the last five years, the company's gross profit rate has averaged 30%. The following information for the year's first quarter is available from its records:
January 1 beginning inventory ....................................... $376,440
Purchases ...............................................................1,066,050
Purchase returns ........................................................19,185
Transportation-in.......................................................32,950
Sales .....................................................................1,855,125
Sales returns ............................................................37,100
Required:
Required Use the gross profit method to prepare an estimate of the company's March 31, 2014, inventory.