Gamma Corp The Amount of Merchandise Inventory to Be Shown on the of 2015

Gamma Corp. is preparing their budget for the 1^st quarter of 2015. The following data is provided: $\begin{array}{|l|r|r|r|}\hline \text { Inven tory, Purchases and COGS Budget } &{\text { Jan }} &{\text { Feb }} & {\text { Mar }} \\\hline \text { Cost of goods sold (a) } & \$ 30,000 & \$ 28,500 & \$ 22,500 \\\hline \text { Desired ending inventory(b) } & \underline{10,700} & \underline{9,500} & \underline{9,800} \\\hline \text { Total inventory required } & 40,700 & 38,000 & 32,300 \\\hline \text { less Beginning inventory } & \underline{-11,000} & \underline{-10,700} & \underline{-9,500} \\\hline \text { Purchases } & 29,700 & 27,300 & 22,800 \\\hline \text { (a) COGS }=75 \% \text { of sales } & & \\\hline \text { (b) } \$ 5,000+20 \% \text { of COGS for next month } & &\\\hline\end{array}$ The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be:

A) $9,500.
B) $10,700.
C) $8,750.
D) $9,800.