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 $59,600. The following information for the month of November was available from company records:

Purchases	$	121,000
Freight-in		4,100
Sales		235,000
Sales returns		16,000
Purchases returns		4,000

In addition, the controller is aware of $5,000 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%.

Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%.

Beginning inventory		$59,600selected answer correct
Plus: Net purchases		not attempted
Freight-in		4,100selected answer correct
Cost of goods available for sale		63,700
Less: Cost of goods sold:
Net sales	not attempted
Less: Estimated gross profit	not attempted
Estimated cost of goods sold		0
Estimated cost of inventory before theft		63,700
Less: Stolen inventory		not attempted
Estimated ending inventory		$63,700

Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%. (Do not round intermediate calculations.)

Beginning inventory		not attempted
Plus: Net purchases		not attempted
Freight-in		not attempted
Cost of goods available for sale		0
Less: Cost of goods sold:
Net sales	not attempted
Less: Estimated gross profit	not attempted
Estimated cost of goods sold		0
Estimated cost of inventory before theft		0
Less: Stolen inventory		not attempted
Estimated ending inventory		$0