The accounting records of Seattle Outlet include the following for January: A physical count determined the cost of inventory on hand at January 31 to be $42,000. If gross profit amounts to 25% of net sales, compute the beginning inventory at January 1.

Select one:

a. $10,000

b. $26,000

c. $8,000

d. $24,000

e. $6,000

Sales Purchases Sales Discounts Freight - In Purchase Returns and Allowances $326,000 260,000 6,000 14,000 2,000