On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $5,000 Net sales: $50,000 Net purchases: $51,000 The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:
$6,000. $26,500. $5,000. $31,500. $42,500.