Answer: Option (C) is correct.
Explanation:
Given that,
Merchandise inventory(beginning inventory) = $1,200,000
Merchandise purchased = $2,400,000
Sales = $3,000,000
Gross profit rate on sales = 25%
Ending inventory of Glaus:
= Beginning inventory + Purchases - cost of goods sold
= $1,200,000 + $2,400,000 - [sales × (100-25)%]
= $1,200,000 + $2,400,000 - $3,000,000 × 0.75
= $1,200,000 + $2,400,000 - $2,250,000
= $1,350,000
