Answer:
$567,056
Explanation:
Cost :
Merchanidize available for sale
= Beginning inventory + Purchases + Freight in
= $386,000 + $1,975,000 + $125,000
= $2,486,000
Retails:
Merchandize available for sale:
= Beginning inventory + Purchases + Markups
= $590,000 + $3,220,000 + $68,000
= $3,878,000
Ending inventory at retail = Retail total -markdowns - Net sales
= $3,878,000 - $104,000 - $2,920,000
= $854,000
Cost to retail ratio = $2,486,000 ÷ ($2,920,000 + $854,000)
= $2,486,000 ÷ $3,744,000
= 66.40%
Ending inventory at retail = $854,000
And
Cost to retail ratio = 66.40%
Therefore,
Ending inventory at cost = $854,000 × 66.40% = $567,056
