Tacita Equipment Co. wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Tacita’s gross profit rate averages 40%. The following information for the first quarter is available from its records.
January 1 beginning inventory . . . . . . . . . $ 301,580
Cost of goods purchased . . . . . . . . . . . . 941,040
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,401,160
Sales returns . . . . . . . . . . . . . . . . . . . . . . 9,100
Required
Use the gross profit method to estimate the company’s first quarter ending inventory.