The following information was taken from the records of Prairie Company.
________________________Jan. 1, 2012-Dec. 31, 2012..........Jan. 1, 2013-Sept. 30, 2013
Sales . . . . . . . . . . . . . . . . . . . . . . . $2,500,000............................$1,500,000
Beginning inventory . . . . . . . . . . . . . 420,000................................785,000
Purchases . . . . . . . . . . . . . . . . . . . ..2,152,000..............................1,061,000
Freight-in . . . . . . . . . . . . . . . . . . . . . .116,000.................................72,000
Purchase discounts. . . . . . . . . . . . . . . .30,000.................................15,000
Purchase returns. . . . . . . . . . . . . . . . . .40,000.................................13,000
Purchase allowances. . . . . . . . . . . . . . . 8,000...................................5,000
Ending inventory . . . . . . . . . . . . . . ..785,000........................................?
Selling and general expenses . . . . . . 450,000................................320,000
Instructions: Using the gross profit method, compute the value to be assigned to the inventory as of September 30, 2013, and prepare an income statement for the 9-month period ending on this date.