ESTIMATING ENDING INVENTORY. Truitt Company operates a wholesale oil products company. Truitt believes that an employee and a customer are conspiring to steal gasoline. The employee records sales to this customer for less than the amount actually placed in the customer’s tank truck. In order to confirm or refute his suspicions, Truitt has collected the following data for the past 10 working days:

REQUIRED:
1. Determine the quantity of inventory Truitt would expect to have on September 10.
2. What is the cost of the missing inventory?
3. How could Truitt arrange the firm’s procedures to make this kind of theft more difficult?

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ITEM Inventory, 9/1 Purchases Goods available for sale: GALLONS OF GASOLINE 220,000 1,560,000 1,780,000 COST PER GALLON TOTAL COST $1.45 1.45 $ 319,000 2,262,000 $2,581,000 Truitt has had sales of $2,512,000 during this 10-day period. All sales have been made at $1.60 per gallon. A physical inventory indicates that there are 192,000 gallons of gasoline in inventory at the close of business on September 10.