Ivanhoe 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 (a) x Your answer is incorrect. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.