ACT5741 with explanation please

1)The ABC Co. uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. Management estimates that the average gross profit rate is 25 percent of sales. The following data relate to the month of May:

Inventory cost, July1	$30,000
Purchases during the month at cost	80,400
Sales	100,800
Sales returns	3,600

Using the data above, what is the estimated ending inventory at July 31?

$24,300

$25,200

$34,800

$37,500

2)

ABC Co. estimates its uncollectible accounts expense to be 2 percent of credit sales. ABCs credit sales for 2016 were $1,000,000. During 2016, ABC wrote off $18,000 of uncollectible accounts. ABCs Allowance for Uncollectible Accounts account had a $15,000 balance on January 1, 2016. On its December 31, 2016 income statement, what amount should ABC report as bad debt expense?

		$23,000
		$20,000
		$18,000
		$17,000