Ernst Equipment Co. wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Ernst's gross profit rate averages 30%. The following information for the first quarter is available from its records.
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January 1 beginning inventory
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$ 752,880
|
|
Cost of goods purchased
|
2,159,630
|
|
Sales
|
3,710,250
|
|
Sales returns
|
74,200
|
Required
Use the gross profit method to estimate the company's first quarter ending inventory.