KingbirdCompany uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

Inventory, May 1$174,600

Purchases (gross)607,000

Freight-in 29,300

Sales revenue 983,300

Sales returns 67,700

Purchase discounts 12,700

Compute the estimated inventory at May 31, assuming that the gross profit is25% of net sales.

Compute the estimated inventory at May 31, assuming that the gross profit is25% of cost