Coronado 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		$ 156,500
Purchases (gross)		628,400
Freight-in		31,900
Sales revenue		1,029,400
Sales returns		74,600
Purchase discounts		10,800

Part 1

Compute the estimated inventory at May 31, assuming that the gross profit is 40% of net sales.