(L04) (Gross Profit Method) Schmidt Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May Purchases (gross) Freight-in Sales Sales returns Purchase discounts S 60,000 140,000 5,500 150,000 17,500 5,000 Instructions (a) (b) Compute the estimated inventory at May 31,assuming that the gross profit is 25% ofsales. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost