Answer: $1,800,000
Explanation:
The merchandise inventory of Glaus at December 31, 2017 will be:
Begining Inventory = $1,600,000
Add: Purchases = $3,200,000
Less: Cost of goods sold = $4,000,000
Add: Gross profit = 25% × $4,000,000 = $1,000,000
Ending Inventory = $1,800,000
The answer is $1,800,000.
