Wentforth Inc. is a prominent retailer and uses the retail inventory method to estimate the value of its ending inventory. Records are kept at cost...

Wentforth Inc. is a prominent retailer and uses the retail inventory method to estimate the value of its ending inventory. Records are kept at cost and retail, or retail only, as follows: 

 Cost Retail 

Inventory, 12/31/17 $250,000 $ 390,000 

Purchases 914,500 1,460,000 

Purchase returns 60,000 80,000 

Purchase discounts 18,000 — 

Gross sales revenue (after employee discounts) — 1,410,000 

Sales returns — 97,500 

Markups — 120,000 

Markup cancellations — 40,000 

Markdowns — 45,000 

Markdown cancellations — 20,000 

Freight-in 42,000 — 

Employee discounts granted — 8,000 

Loss from breakage (normal) — 4,500 

a. Assuming that Wentforth Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at December 31, 2018.

b. How would this estimate differ if Wentforth used the historical retail inventory method?

c. Which method should Wentforth use?