Answer:
$544,621
Explanation:
Cost :
Merchandize available for sale
= Beginning inventory + Purchases + Freight in
= $379,000 + $1,835,000 + $118,000
= $2,332,000
Retail:
Merchandize available for sale
= Beginning inventory + Purchases + Markup
= $583,000 + $3,080,000 + $61,000
= $3,724,000
Ending inventory at retail
= Retail total - Mark down - Net sales
= $3,724,000 - $97,000 - $2,780,000
= $847,000
Cost to retail ratio
= $2,332,000 ÷ ( $2,780,000 + $847,000)
= $2,332,000 ÷ $3,627,000
= 64.30%
Since ending inventory at retail = $847,000
And
Cost to retail = 64.30%
Therefore,
Ending inventory at cost = $847,000 × 64.30%
Ending inventory at cost = $544,621