Compute the estimated inventory at May

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Question - Kingbird 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 $174,600

Purchases (gross) 607,000

Freight-in 29,300

Sales revenue 983,300

Sales returns 67,700

Purchase discounts 12,700

Required -

1. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.

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

Reference no: EM132782366

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