On the basis of the following data, what is the estimated cost of the merchandise inventory on May 31 using the retail method?
Cost Retail
May 1 Merchandise Inventory $125,000 $166,667
May 1-31 Purchases (net) 235,000 313,333
May 1-31 Sales (net) 230,000
a. $250,000
b. $360,000
c. $172,500
d. $187,500