Data for Questions 5 through 8 Insley, Inc. prepares annual financial statements and uses a perpetual inventory system. However, management is concerned that its newly-installed inventory system has not been properly maintained. Inventory is counted only at year end. As a result, management would like to estimate March 31, 2020 inventory using the gross profit method. The estimated average gross profit is 35.0% (based upon management's estimate of a markup on cost of about 54%). The following information is available for the first quarter of 2020: Inventory, January 1 $ 125,000 Purchases during January - March 485,000 Purchase returns during January - March (35,000) Credit sales during January - March 600,000 Cash sales during January - March 40,000 QUESTION 6 Assume that the general ledger (based on perpetual records) show an inventory value of $165,000. Prepare the journal entry, if necessary. TT T Arial 3 (12pt) TSE 5.025 Words: 04 Path:p QUESTION 7 Assume that management has asked for a revised calculation based on a new estimate of 60.0% markup on cost. What markup on selling price (gross profit) should be used to make this determination? T . =