Smith & Olley Company for several years has maintained a 30 percent average gross margin on sales. Given the following data for 2007, what is the approximate inventory on December 31, 2007, computed by the gross margin method of estimating inventory? Inventory on January 1 - $24,000; net cost of purchases - $130,000; and net sales at retail in 2007 - $180,000.

A. $35,100

B.$23,100

C.$28,000

D.$54,000

E.$26,000