Intermediate Accounting Inventories - Show Complete Solution and Explain:

Question 40

For Items 40 to 42

The retail inventory method is used by Red Company. For the current year, the following data is available:

COST RETAIL Beginning Inventory P5,500,000 P6,800,000 Purchases 23,450,000 27,500,000 Freight in 1,200,000 Purchase returns 1,000,000 1,300,000 Purchase allowances 1,500,000 Departmental transfer in 800,000 1,000,000 Net markups 900,000 Net markdowns 2,100,000 Sales 3,500,000 Sales returns 500,000 Sales discounts 350,000 Employee discount 800,000 Loss from breakage 150,000