Sheridan Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is

information for the month of May.

$($a$)$

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Compute the estimated inventory at May $31,$ assuming that the gross profit is $25\%$ of sales.

The estimated inventory at May $31,$$

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$($b$)$

Compute the estimated inventory at May $31,$ assuming that the gross profit is $25\%$ of cost$.($Round percentage of sales to $2$ decimal

places, e$.$g$.78\mathrm{.}74\%$ and final answer to $0$ decimal places, e$.$g$.6,225.)$

The estimated inventory at May $31,$$