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Sarasota Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented...

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Accounting

Sarasota 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 $170,600

Purchases (gross) 689,500

Freight-In 29,300

Sales Revenue 975,600

Sales Returns 75,600

Purchase Discounts 11,000

(1) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.

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