As a result of taking a physical inventory count on December 31, 20106 the Cookie Company inventory was determined to be $425,000. The auditors for Cookie 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:

Inventory (1/1/16)	$ 330,000
Purchases (2016)	1,770,000
Sales (2016)	2,200,000
Sales returns (2016)	100,000
Gross profit ratio	25% of sales

Using the gross profit method, what did the auditors estimate as the amount of the inventory shortage at December 31, 2016?

$75,000

$15,000

$100,000

$0