Teal 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		$ 169,600
Purchases (gross)		677,700
Freight-in		30,300
Sales revenue		957,200
Sales returns		74,300
Purchase discounts		13,100

(a)

Correct answer iconYour answer is correct.

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

The estimated inventory at May 31

$enter the dollar amount of the estimated inventory at May 31

eTextbook and Media

Attempts: 1 of 3 used

(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. 78.74% and final answer to 0 decimal places, e.g. 6,225.)

The estimated inventory at May 31

$enter the dollar amount of the estimated inventory at May 31

eTextbook and Media

Save for Later

Attempts: 0 of 3 used

Submit Answer