Food Depot Ltd If the Gross Margin Method Is Used to Estimate Ending

Food Depot Ltd.assembled the following information at the end of the current reporting period: $\begin{array} { l } \text {Sales revenue. }&\$56,400\\ \text {Beginning inventory. }&21,250\\ \text {Purchases. }&9,000\\ \text {Purchase returns. }&600\\ \text {Freight-in.. }&950\\ \text {Selling expense. }&15,750\\ \text {Mark-up on cost (estimated) }&25percent\\\end{array}$
If the gross margin method is used to estimate ending inventory,what amount should be reported as pre-tax income or loss?

A) $4,470 loss
B) $15,975 income
C) $26,870 income
D) $29,370 income
E) $5,345 loss