Question 1 Sunland Company uses the gross profit method to estimate inventory fo

Question

Question 1 Sunland 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 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts 162,100 691,300 30,800 1,041,700 65,900 12,500 (a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of net sales. The estimated inventory at May 31 s Attempts: o of 5 used SAVE OR LATER SUBMIT ANSWER SUBMIT ANSWER

Explanation / Answer

Inventory, May 1 162100 Purchases 691300 Freight-in 30800 Less: Purchases discounts -12500 Cost of goods available 871700 Less: Sales revenue 1041700 Less: Sales return -65900 Net sales 975800 Less: Gross Profit 292740 Cost of goods sold 683060 The estimated inventory at May 31 188640

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