Reference no: EM133090643

Question - On January 1, The Parts Store had a $470,000 inventory at cost. During the first quarter of the year, it purchased $1,610,000 of merchandise, returned $24,100, and paid freight charges on purchased merchandise totalling $38,600. During the past several years, the store's gross profit on sales has averaged 20%. Under the assumption the store had $2,020,000 of sales during the first quarter of 40 the year, use the gross profit method to estimate its inventory at the end of the first quarter.