Blackfly Ltd. had sales of $500,000 in 2007, all made on credit terms. The company collected $25,000 from credit sales made in 2006, and at the end of 2007 its customers owed the company $50,000. Inventory of young trees as at December 31, 2007 was 10,000 seedlings, each of which had cost $0.10. Unfortunately the seedlings would not last until the start of the 2008 planting season. The cost of closing inventory for 2007 was

*

$10,000

$1,000

$500

$0

none of the above