MALCOLM Inc. sells merchandise at a gross profit rate of 30% based on cost. The entity has two branches located in California and Florida. These branches have separate warehouses where inventories are stored and keep separate records for proper monitoring. The warehouse of the California branch was destroyed by fire and the entire inventory was severely damaged. A physical inventory disclosed usable damaged goods which can be sold to a jobber for $60,000 and it was found out that the invoice received amounting to $35,000 for goods purchased were still in transit on October 31,2023 , FOB Shipping point. During the physical count in the warehouse of the Florida branch, the inventory balance was determined to be $68,000. However, the entity discovered that the balances based on records and physical counts were different. The entity believed that the records were correct and suspected that some inventory may have been taken by some employees. The net sales reported by the California and Florida branch were 1,560,000 and 1,430,000. 1. What is the estimated cost of the missing inventory? A. 90,000 B. 121,000 C. 189,000 D. 22,000 2. What is the estimated cost of the destroyed inventory? A. 328,000 B. 220,000 C. 125,000 D. 138,846