Answer:
$112,550
Step-by-step explanation:
The gross profit method of calculating ending inventory estimates the first determines the cost of goods available for sale.
The cost of goods available for sale is equal beginning inventory plus net purchases.
Beginning inventory is $94,000.00
Net purchases= Purchases + returns - discounts allowed + purchases
if all discounts were taken, payment was made with 15 days meaning a 1% discount was given.
Net purchases =$400,000 - 5000-(1% of $400,000-$5000)
=$395,000- (0.01 x 395,000)
$395,000-3950 + 7500
Net purchases =$398,550
Cost of goods available for sale
= $398,550 +$94,000
=$492,550
If the cost of cost sold was $380,000
The ending inventory will be costs of goods available for sale - cost of goods sold
=$492,550 - $380,000
=$112,550