Astaire 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 $190,400
Purchases (gross) 761,600
Freight-in 35,700
Sales 1,190,000
Sales returns 83,300
Purchase discounts 14,280
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.