Exercise 9-14

Sheffield 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		$ 167,300
Purchases (gross)		580,800
Freight-in		32,100
Sales revenue		1,079,300
Sales returns		73,300
Purchase discounts Compute the estimated inventory at May 31, assuming that the gross profit is 35% of net sales. Compute the estimated inventory at May 31, assuming that the gross profit is 35% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)		11,300