Your audit of Red Velvet Companys inventory and related records revealed the following information:

Merchandise inventory, January 1, 2019 670,000

Purchases for the year 2019 4,280,000

Sales for the year 2019 5,250,000

You conducted a physical inventory on December 31, 2019 and determined P850,000 was in the companys warehouse. The companys president suspects some new employees may have pilfered a portion of the merchandise inventory.

1.) Determined the estimated cost of the missing inventory, assuming Red Velvet Companys gross profit remained constant at 30% of cost of sales

2.) Determined the estimated cost of the missing inventory, assuming Red Velvet Companys gross profit remained constant at 30% of sales.