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At the beginning of 2004, the Race Company had an inventory valued at $34,375 at cost ($50,000 at retail). During the year, Race purchased inventory

At the beginning of 2004, the Race Company had an inventory valued at $34,375 at cost ($50,000 at retail). During the year, Race purchased inventory for $50,000 ($70,000 at retail), and made markdowns of $7,500. Race's sales in 2004 were $72,500. What is Race's estimated ending inventory at FIFO cost, using the retail inventory method?

a.

$32,000

b.

$40,000

c.

$39,000

d.

$34,375

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