Tennessee Ltd A Physical Inventory Taken on December 31, 2020, Resulted in l

Tennessee Ltd.'s accounting records reported the following information: $$\begin{array} { l l } \text { Inventory, dan } 1,2020 & \$300,000 \\\text { Purchases during } 2020 & 1,500,000 \\5 a l e = \text { during } 2020 & 2,000,000\end{array}$$ A physical inventory taken on December 31, 2020, resulted in an ending inventory of $350,000. Tennessee's gross profit on sales has remained constant at 30% in recent years. Tennessee suspects some inventory may have been taken by a new employee. At December 31, 2020, what is the estimated cost of the missing inventory?

A) $400,000
B) $100,000
C) $75,000
D) $50,000

Correct Answer:

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