The sales and cost of goods sold for Lively Company for the past five years were

The sales and cost of goods sold for Lively Company for the past five years were as follows:YearSales (net)Cost of Goods Sold2004$9984960$62406002005107942406746400200612346560771660020071192608072720002008127478407920000The following information is for the seven months ended 2009 July 31:Sales$7748000Purchases4588800Purchase returns28800Sales returns173760Merchandise inventory2009 January 1948000To secure a loan Lively Company has been asked to present current financial statements. However the company does not wish to take a complete physical inventory as of 2009 July 31.a. Indicate how financial statements can be prepared without taking a complete physical inventory.b. From the data given compute the estimated inventory as of 2009 July 31.