6. (4 points) Hornacek Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Instructions Inventory, May 1 $ 120,000 Purchases (gross) Freight-in 770,000 32,000 Sales revenue 1,050,000 Sales returns 70,000 Purchase discounts 48,000 (a) Compute the estimated inventory at May 31, assuming that the gross profit is 20% of sales. (b) Compute the estimated inventory at May 31, assuming that the gross profit is 20% of cost.