(Answered) Question - astaire company uses the gross profit method to

Accounting

Question - Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

Inventory, May 1	$ 172,600
Purchases (gross)	659,300
Freight-in	31,300
Sales	1,077,700
Sales returns	76,900
Purchase discounts	12,770

(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.

(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.

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