Ralph 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 $175,600

Purchases (gross) 617,400

Freight-in 31,700

Sales revenue 973,200

Sales returns 68,100

Purchase discounts 12,900

(a)Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales

The estimated inventory at May 31: $_______________

(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost

The estimated inventory at May 31: $________________

*Please answer all sections and show your work while clearly explaining. Thank you