Sandhill 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		$ 160,700
Purchases (gross)		595,100
Freight-in		28,600
Sales revenue		1,028,100
Sales returns		74,200
Purchase discounts		11,600

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

The estimated inventory at May 31