You are auditing the records of Omega Corporation. The company took a physical inventory under your observation. However, the valuations have not been completed. The records of the company provide the following data: sales, $800,000 (gross); returned sales, $35,000 (returned stock); purchases (gross), $500,000; beginning inventory, $32,000; freight-in $16,000; and purchase returns and allowances, $14,000. You anticipate that the gross margin will average 30% of net sales for the year under audit.

Required: Compute the cost of goods available for sale and estimate the cost of the ending inventory using the gross margin method. Show all calculations.

Cost of goods available for sale:_____________________

Cost of the ending inventory:________________________