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

Skysong 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 Purchases (gross) Freight-in Sales revenue Sales returns $ 162,100 691,300 30,800 1,041,700 65,900 12,500 Purchase discounts