(Using the retail method, LO 2) Neighbour Inc. (Neighbour) is a small local boutique. Neighbour uses the retail method for determining its ending inventory. The store has an April 30 year end. On May 1, 2003 Neighbour had opening inventory with a cost of $200,000 and retail value of $280,000. During the year Neighbour purchased inventory for $1,000,000. The inventory purchased during the year had a retail value of $1,640,000. When the inventory was counted on April 30, 2004, there was $220,000 of inventory on hand valued at its retail price. Sales during the year ended April 30, 2004 were $1,700,000.

Required:

Estimate the cost of inventory on April 30, 2004 using the retail method.