Answer: The ending inventory is $43,500
Explanation:
Cost. Retail
$ $
Beginning inventory. 125,000 166,667
Add :Purchases 235,000 313,333
-------------------- -----------------------
Cost of good available for sale 360,000 480,000
Cost to retail ratio
360,000 ÷ 480,000
= 0.75
Cost. Retail
$ $
Cost of good available for sale 360,000 480,000
Less:Sales. 230,000 250,000
360,000. 172,500
187,500
-------------------- ----------------
(417,500) 58,000
Ending inventory × 0.75 (58,000 × 0.75) = 43,500
Cost to retail ratio.
Ending inventory. $43,500
