Keen Company's accounting records indicated the following information: A physical inventory taken on December 31, 2014, resulted in an ending inventory of $1,400,000. Keen's gross profit on sales has remained constant at 25% in recent years. Keen suspects some inventory may have been taken by a new employee. At December 31, 2014, what is the estimated cost of missing inventory?
A) $100,000.
B) $300,000.
C) $400,000.
D) $500,000.

Question

Keen Company's accounting records indicated the following information:  A physical inventory taken on December 31, 2014, resulted in an ending inventory of $1,400,000. Keen's gross profit on sales has remained constant at 25% in recent years. Keen suspects some inventory may have been taken by a new employee. At December 31, 2014, what is the estimated cost of missing inventory?
A) $100,000. 
B) $300,000. 
C) $400,000. 
D) $500,000.

Quizplus · Accepted Answer

The Answer of Keen Company's accounting records indicated the following information:  A physical inventory taken on December 31, 2014, resulted in an ending inventory of $1,400,000. Keen's gross profit on sales has remained constant at 25% in recent years. Keen suspects some inventory may have been taken by a new employee. At December 31, 2014, what is the estimated cost of missing inventory?
A) $100,000. 
B) $300,000. 
C) $400,000. 
D) $500,000.

Keen Company's Accounting Records Indicated the Following Information: a Physical