Question

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

Answer 1