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On January 1

Accounting

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On January 1. The Parts Store had a $430,000 inventory at cost. During the first quarter of the year. It purchased $1.570,000 of merchandise returned $22100, and paid freight charges on purchased merchandise totalling $36,600. During the past several years. the store's gross profit on sales has averaged 30%. Under the assumption the store had $1,980,000 of sales during the first quarter of the year, use the gross profit method to estimate its inventory at the end of the first quarter. Ending inventory