Answer: Option (c) is correct.
Explanation:
Gross profit of 30% means that every $1 of Sales require $0.7 of inventory and cost of freight.
So, inventory used to generate sales of $3,630,000:
= $3,630,000 x 0.7
= $2,541,000
Total inventory during the period:
= Beginning inventory + Purchases
= $4,950,000 + $2,049,000
= $6,999,000
Remaining Inventory:
= (Total inventory - Inventory used to generate sales) + freight-in
= ($6,999,000 - $2,541,000) + $234,000
= $4,692,000
