2. Show your calculations fully for estimating (a)-closing inventory and (b)- Preparation of the Income statement. (MARKS:6) 7. The Sutton Hardware Store takes inventory only at the end of the calendar year because of the inconvenience involved. The gross profit of the business is stable and averages 40% of sales. On January 31, at the end of the first month of business, the ledger included the following five account balances: Merchandise Inventory $ 51 920 Sales 103 850 Purchases 73 950 Freight-in I 258 Operating Expenses 22 357 Use the above information to estimate the closing inventory. Then, prepare a condensed income statement for the month of January