Answer:
$371,228
Explanation:
Cost = Beginning inventory + purchases + freight
= $260,000 + $1,370,000 + $86,000
= $1,716,000
Retail = Beginning inventory + purchases + mark-up
= $396,000 + $2,200,000 + $48,000
= $2,644,000
Closing (retail) = Retail - markdown - sales
= $2,644,000 - $72,000 - $2,000,000
= $572,000
Cost to retail ratio = Cost ÷ Retail
= $1,716,000 ÷ $2,644,000
= 0.649017
Therefore,
Ending inventory value at cost = Closing (retail) × Cost to retail ratio
= $572,000 × 0.649
= $371,228
