Augustus Inc. estimates future sales as follows:

January 60,000 units $480,000

February 44,500 units $356,000

March 52,000 units $416,000

April 49,000 units $392,000

Augustus Inc.s past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on December 31^st of the previous year contained 12,000 units.

The company collects its sales 65% in the month of sale and 35% in the month after sale.

The income statement for the first quarter (January-March) should report what amount for sales?

1. $156,500
2. $1,252,000
3. $1,106,400
4. $1,644,000