4. Mark Price 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 Purchase discounts Instructions $ 160,000 640,000 30,000 1,000,000 70,000 12,000 a. Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. b. Compute the estimated inventory at May 31, assuming that the gross profit is 30% of cost. 5. Tim on hand on January I was $38,000. Purchases since January I were $72,000; freight-in, $3,400; purchase returns Compiled by Nesredin Y. Page 1