Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the company included the information shown below: Sales $1,100,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $67,000 Purchases 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold 777,000 Gross profit on sales $323,000 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead, they had merely estimated the inventory. Required: Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates.