Dart Company’s accounting records indicated the following information:
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Inventory, 1/1/06 |
$ 500,000 |
|
Purchases during 2006 |
2,500,000 |
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Sales during 2006 |
3,200,000 |
A physical inventory taken on December 31, 2006, resulted in an ending inventory of $575,000. Dart’s gross profit on sales has remained constant at 25% in recent years. Dart suspects some inventory may have been taken by a new employee. At December 31, 2006, what is the estimated cost of missing inventory?
- $ 25,000
- $100,000
- $175,000
- $225,000