Furlana Company Limited uses the gross profit method to estimate inventory for monthly reports. Information follows for the month of May:

Instructions
(a) Calculate the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
(b) Calculate the estimated inventory at May 31, assuming that the markup on cost is 25%. Round the gross profit percentage to two decimal places.

Transcribed Image Text:

Inventory, May 1 Purchases Freight-in $360,000 700,000 50,000 Sales Sales returns Purchase discounts $1,200,000 70,000 12,000