Answer:Ending Inventory at Cost= $981,248.40
Explanation:
Cost Retail
Beginning inventory $393,500 $594,000
purchases $3,408,000 $5,193,600
freight in $159,500,
net markups $414,000
Total $3,961,000 $6,201,600
Sales $4,666,000
Ending Inventory at Retail:=(Beginning inventory + purchases +net markups - Sales during the current year
594,000 + $5,193,600 + $414,000- $4,666,000, = $1,535,600
Cost to Retail Ratio:(
Beginning inventory + purchases+freight in)/ (Beginning inventory + purchases +net markups )
=($393,500 + $3,408,000 +$159,500,) ÷ (594,000 + $5,193,600 + $414,000) =$3,961,000/$6, 201, 600= 0.638= 0.639
Ending Inventory at Cost: Ending Inventory at Retail x Cost to Retail Ratio
$1,535,600 x 0.639 = $981,248.40
