What is the ending balance of merchandise inventory as of January 31, 2025?

• A. $480,000
• B. $492,215
• C. $500,000
• D. $510,000

Answer: (B)

Ending merchandise inventory represents what remains on hand after accounting for what was available for sale and what was consumed during the period. In a periodic system, you start with beginning inventory, add net purchases (purchases minus returns/allowances plus freight-in), to get cost of goods available for sale, and then subtract cost of goods sold to arrive at ending inventory. The ending balance thus depends on how much was sold (COGS) relative to what was available.

The value 492,215 is the amount left after applying those steps with the given data and the cost flow method used. It reflects the remaining inventory after COGS is subtracted from the cost of goods available for sale. The other numbers would imply different COGS or net purchases than those provided in the data.