When preparing its quarterly financial statements, Pace Co. uses the gross margin method to estimate ending inventory. The following information is available for the quarter ending March 31, Year 2: Beginning inventory$223,000? Purchases$788,000? Sales$1,095,000? Estimated gross margin percentage 45?% What is the estimated amount of inventory that is on hand on March 31, Year 2? (Do not round your intermediate calculations.)
A. $454,950
B. $556,050
C. $408,750
D. $602,250
Answer: C
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