EX 7-21 Retail inventory method

On the basis of the following data, estimate the cost of the merchandise inventory at November 30 by the retail method:

Cost

Retail

November 1

Merchandise inventory

$ 300,000

$ 400,000

November 1–30

Purchases (net)

2,100,000

2,800,000

November 1–30

Sales (net)

2,750,000