A fire destroys all of the merchandise of Coronado Company on February 10, 2017. Presented below is information compiled up to the date of the fire:

Inventory, January 1, 2017 $423,300

Sales revenue to February 10, 2017 1,924,500

Purchases to February 10, 2017 1,140,950

Freight-in to February 10, 2017 56,790

Rate of gross profit on selling price 40%

What is the approximate inventory on February 10, 2017

Value of inventory = $466,040

Explanation:

The value of goods in inventory

=Value of opening inventory + cost of purchases - cost of gold sold

Note that there is a gross profit on selling price, therefore the cost of the goods sold would be

Cost of goods sold = sales value - (40% * sales value)

= 1,924,500 - (40% * 1,924,500)

= 1,154,700.00

Value of inventory = 423,300 + (1,140,950 + 56,790) - 1,154,700.00

=$466,040

Note that the freight-in was added as part of the cost of purchases on February 10