Tate Tasers Inc. is preparing interim financial statements for the quarter ending 31 March 20X1 and needs to estimate the value of inventory on hand at the end of the quarter. Physical inventory counts are taken only at the end of the fiscal year. The following information is available:

Beginning inventory.............. $ 400,000

Purchases ...................900,000

Sales .....................1,500,000

Sales returns (to stock) ............. 40,000

In- bound shipping on purchases.......... 26,000

Out- bound shipping to customers.......... 42,000

HST on purchases................ 117,000

HST on net sales................. 190,000

Import duties .................40,000

Inventory storage costs ..............6,000

The average gross margin ratio is 30%. Required: Using the gross margin method, determine the cost of ending inventory and the cost of sales for the quarter.