Problem 5-23A Estimating ending inventory: gross margin method LO 5-4 Toyland wishes to produce quarterly financial statements, but it takes a physical count of inventory only at year-end. The following historical data were taken from the Year 1 and Year 2 accounting records: Net sales Cost of goods sold Year 1 $167,000 69,100 Year 2 $184,000 74,810 At the end of the first quarter of Year 3, Toyland's ledger had the following account balances: Sales Purchases Beginning inventory 1/1/Year 3 Ending inventory 3/31/Year 3 $246,000 162,000 63,100 96, 400 Based on purchases and sales, the Toyla accountant thinks inventory is low. Required Using the information provided, estimate the following for the first quarter of Year 3: a. Cost of goods sold. (Use the average cost of goods sold percentage) (Round your intermediate percentage values to 2 decimal places and final answer to nearest whole dollar amount.) b. Ending inventory at March 31 based on the historical cost of goods sold percentage. c. Inventory shortage a. Cost of goods sold b Estimated ending inventory Estimated Inventory shortage