As a Result of Taking a Physical Inventory Count on December

question 126

Multiple Choice

As a result of taking a physical inventory count on December 31, 2016, the Mona Lisa Company inventory was determined to be $61,500. The auditors for Mona Lisa suspected an inventory shortage and used the gross profit method to estimate the ending inventory. The accounting records for the company contained the following information:
Using the gross profit method, what did the auditors estimate as the amount of the inventory that should have been on hand at December 31, 2016?

• A) $240,000
• B) $170,000
• C) $125,000
• D) $ 61,500

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