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Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $59,600. The following information for the month of November was available from company records:

Purchases	$	121,000
Freight-in		4,100
Sales		235,000
Sales returns		16,000
Purchases returns		4,000

In addition, the controller is aware of $5,000 of inventory that was stolen during November from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%. 2. Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%.

Required 1 d 1 Required 2 Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%. $ Beginning inventory Plus: Net purchases Freight-in Cost of goods available for sale Less: Cost of goods sold: 59,600 117,000 4,100 180,700 Net sales $ 94,000 94,000 Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory before theft Less: Stolen inventory Estimated ending inventory 180,700 (5,000) 175,700 $ Required 1 Required 2 > Required 1 Required 2 Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%. (Do not round intermediate calculations.) Beginning inventory Plus: Net purchases Freight-in Cost of goods available for sale Less: Cost of goods sold: Net sales Less: Estimated gross profit Estimated cost of goods sold Estimated cost of inventory before theft Less: Stolen inventory Estimated ending inventory $ 0

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