Northwest Fur Co. started 2018 with $100,000 of merchandise inventory on hand. During 2018, $410,000 in merchandise was purchased on account with credit terms of 4/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,600. Merchandise with an invoice amount of $3,900 was returned for credit. Cost of goods sold for the year was $380,000. Northwest uses a perpetual inventory system.

What is ending inventory assuming Northwest uses the gross method to record purchases?

• $133,700.

• $117,456.

• $137,600.

• $117,396.