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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
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. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $ 120,000 770,000 32,000 1,050,000 70,000 48,000 Instructions (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
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