In reviewing the draft financial statements for the year ended December 31, 2020, CPA Co. decided that market conditions were such that the provision for inventory obsolescence on December 31, 2020 should be increased by P3,000,000?

If the same basis of calculating inventory obsolescence had been applied on December 31, 2019 the provision would have been P1,800,000 higher than the amount:

Recognized in the statement of comprehensive income:

1.)What adjustment should be made to net income of 2020? (Identify whether increase or decrease by enclosing?

 

2.)Under accrual basis, what amount should be reported as net sales?

Answer rating: 100% (QA)

1Decrease in net income of 2020 by P3000000 The increase in th... View the full answer