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Boomer Company reserves for inventory on hand that it estimates to be obsolete or slow moving. For the year ending 12/31/2021, the expense account associated with this reserve has a balance of $80,000. Industry averages suggest that 3 percent of the year-end inventory balance is obsolete on average, with higher percentages deemed obsolete for inventory still in the warehouse from Q1 purchases (6% obsolete) than from inventory purchased and still in the warehouse from Q2 (3% obsolete), Q3 (2% obsolete), or Q4 (1% obsolete). Boomer has provided the following information on inventory in the warehouse at 12/31/2021, broken down by the month in which that inventory was originally purchased:

Month of Purchase	$ Inventory on Hand
January	79,700
February	83,400
March	39,000
April	98,500
May	84,800
June	77,300
July	112,500
August	118,700
September	110,500
October	350,400
November	640,900
December	946,300
Total 12/31 Inventory Balance	$2,742,000

Total 12/31 Inventory Balance: $2,742,000 Follow and document the steps discussed in class and in AU-C 520 to plan and perform a substantive analytical procedure on the reserve account. Boomers pre-tax income is $357,570. The audit plan calls for high assurance from this substantive analytic and inventory is a high-risk account. Round all figures to the nearest dollar.

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