Coronado Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented...
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Accounting
Coronado 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 | $ 156,500 | |
| Purchases (gross) | 628,400 | |
| Freight-in | 31,900 | |
| Sales revenue | 1,029,400 | |
| Sales returns | 74,600 | |
| Purchase discounts | 10,800 |
Part 1
Compute the estimated inventory at May 31, assuming that the gross profit is 40% of net sales.
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