Frecoso Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented...
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Accounting
Frecoso 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 | $ 162,100 | |
| Purchases (gross) | 691,300 | |
| Freight-in | 30,800 | |
| Sales revenue | 1,041,700 | |
| Sales returns | 65,900 | |
| Purchase discounts | 12,500 |
Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.
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