Question

Vaughn Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Vaughn 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 $ 167,300
Purchases (gross) 580,800
Freight-in 32,100
Sales revenue 979,300
Sales returns 73,300
Purchase discounts 11,300

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

The estimated inventory at May 31

$enter the dollar amount of the estimated inventory at May 31

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)

The estimated inventory at May 31

$enter the dollar amount of the estimated inventory at May 31

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