Sage Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented...
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Accounting
Sage 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
$ 156,000
Purchases (gross)
663,700
Freight-in
31,500
Sales revenue
1,061,800
Sales returns
72,100
Purchase discounts
13,100
Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.
(A) The estimated inventory at May 31 $_______________
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.)
(B) The estimated inventory at May 31 $___________________
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