E8-24 (Gross Profit Method) Milan Company Limited uses the gross profit method to estimate inventory for monthly reports. Information follows for the month of May: Inventory, May 1 Purchases Freight-in $360,000 700,000 50,000 Sales Sales returns Purchase discounts $1,200,000 70,000 12,000 Instructions (a) Calculate the estimated inventory at May 31, assuming that the gross profit is 25% of sales. (b) Calculate the estimated inventory at May 31, assuming that the markup on cost is 25%. Round the gross profit percentage to two decimal places