Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,900. The following information for the month of November was available from company records: Purchases $ 114,000 Freight-in 3,400 Sales 200,000 Sales returns 9,000 Purchases returns 6,000 In addition, the controller is aware of $10,000 of inventory that was stolen during November from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%. 2. Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%.

caiculations.) Beginning inventory Plus: Net purchases $ 58,900 108,000 Freight-in 3,400 Cost of goods available for sale 170,300 Less: Cost of goods sold: Net sales 191,000 Less: Estimated gross profit (57,300) Estimated cost of goods sold 133,700 Estimated cost of inventory before theft 36,600 Less: Stolen inventory 10,000 $ Estimated ending inventory 26,600 Required 1 Required 2 Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%. Beginning inventory Plus: Net purchases 58,900 108,000 Freight-in 3,400 Cost of goods available for sale 170,300 Less: Cost of goods sold: Net sales 191,000 Less: Estimated gross profit (76,400) Estimated cost of goods sold Estimated cost of inventory before theft Less: Stolen inventory 114,600 55,700 10,000 Estimated ending inventory 45,700 Required 2 Required 1