Belle Equipment Co. wants to prepare interim financial statements for the first quarter of 2023. The company uses a periodic inventory system but would like to avoid making a physical count of inventory. During the last five years, the company’s gross profit rate has averaged 30%. The following information for the year’s first quarter is available from its records:

Required
Use the gross profit method to prepare an estimate of the company’s March 31, 2023, inventory.

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January 1 beginning inventory... Purchases....... Purchase returns.... Transportation-in... Sales.......... Sales returns....... $376,440 1,066,050 19,185 32,950 1,855,125 37,100