Henson Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $122,500. The following information for the month of August was available from company records:

Purchases $214,700

Freight-in 5,200

Sales 341,000

Required: Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 30%. SHOW COMPUTATIONS