Answer:
$1,012,696
Explanation:
The computation is shown below:
At Cost method:
Merchandise available for sale is :
= Beginning inventory + Purchases + Fright-in
= $403,500 + $3,608,000 + $169,500
= $4,181,000
At Retail method:
Merchandise available for sale:
= Beginning inventory + Purchases + Markups
= $604,000 + $5,393,600 + $424,000
= $6,421,600
Now
Ending inventory at retail is
= Retail - Markdowns - Net sales
= $6,421,600 - $0 - $4,866,000
= $1,555,600
Now
Cost to retail ratio is
= $4,181,000÷ ($4,866,000 + $1,555,600)
= 65.10%
And finally the ending inventory at cost is
= $1,555,600 × 65.10%
= $1,012,696
