Answer:
$200,455
Explanation:
For calculating the inventory by the conventional retail inventory method. we required to do the following computations which are shown below:
Using cost method
Goods available for sale:
= Beginning inventory + Purchases
= $362,797 + $1,370,000
= $1,732,797
Using retail method
Goods available for sale:
= Beginning inventory + Purchases + Net markups - Net markdowns
= $286,000 + $2,145,000 + $80,300 - $27,800
= $2,483,500
Now
Cost to retail ratio = $1,732,797 ÷ ($286,000 + $2,145,000 + $80,300)
= $1,732,797 ÷ $2,511,300
= 0.69
Now
Estimated ending inventory at retail
= Goods available for sale under Retail method - Sales revenue
= $2,483,500 - $2,193,000
= $290,500
So,
Estimated ending inventory at cost:
= Estimated ending inventory at retail × Cost to retail ratio
= $290,500 × 0.69
= $200,455
