Magic Carpets began the year with inventory of $1,400,000. Inventory purchases for the year totalled $3,200,000. Sales

Question:

Magic Carpets began the year with inventory of $1,400,000. Inventory purchases for the year totalled $3,200,000. Sales revenue for the year was $7,000,000, and the gross margin was 45 percent. How much is Magic Carpets’ estimated cost of ending inventory? Use the gross margin method.

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