For the period from 2014 through 2015, the Charlie Company had net sales of $500,000 and a gross profit of $200,000. During the first quarter of 2016, the company made purchases of $19,500 and recorded sales of $47,500. The inventory value at the beginning of the year was 15,500. What is the estimated cost of Charlie's inventory on March 31, 2016, using the gross profit method?

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The gross profit percentage is 40% ($200,000 gross profit / $500,000 sales). The cost of goods sold for the first quarter of 2016 is $28,500 ($47,500 sales - 40% gross profit). The estimated ending inventory is $6,500 ($15,500 beginning inventory + $19,500 purchases - $28,500 cost of goods sold).

For the Period from 2014 Through 2015, the Charlie Company