Buffalo 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 $ 156,000 Purchases (gross) 663,700 Freight-in 31,500 Sales revenue 1,061,800 Sales returns 72,100 Purchase discounts 13,100 Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.

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