Sheridan 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		$ 159,500
Purchases (gross)		593,300
Freight-in		32,900
Sales revenue		974,400
Sales returns		75,900
Purchase discounts		10,800

Part 1

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