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?