Workout MC #2:

Evermore 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 $100,000

Purchases (gross) 700,000

Freight-in 12,500

Sales revenue 900,000

Sales returns 10,000

Purchase discounts 20,000

Compute the estimated inventory at May 31, assuming the gross profit is 33 percent of cost.

		$186,637
		$125,000
		$199,137
		$112,500