Henke Co. uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to the computation of the inventory at July 31, 2014, are as follows: Cost Retail Inventory, 2/1/14 $ 200,000 $ 250,000 Purchases 1,000,000 1,575,000 Markups, net 175,000 Sales 1,600,000 Estimated normal shoplifting losses 20,000 Markdowns, net 110,000 Under the lower-of-cost-or-market method, Henke's estimated inventory at July 31, 2014 is a. $162,000. b. $174,000. c. $186,000. d. $270,000.