ACC 422 Week 3 HW 2 answers below »

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$178,400Purchases (gross)642,100Freight-in30,700Sales1,011,200Sales returns76,300Purchase discounts12,170
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
The estimated inventory at May 31$
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
The estimated inventory at May 31$

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