Suppose Digby Company's accounting records indicated the following information:

Inventory, 1/1/05..................................... 1,000,000

Purchases during 2005 ................................. 5,000,000

Sales during 2005 ..................................... 6,400,000

A physical inventory taken on December 31, 2005, revealed actual ending inventory at cost was $1,150,000. Digby's gross profit on sales has regularly and consistently been 25% in recent years. The company believes some inventory may have been stolen during the year. What is the estimated amount of missing inventory at December 31, 2005?

Question 27 options:

$50,000

$200,000

$350,000

$450,000