Answered: entity had net purchases of P100. If…

entity had net purchases of P100. If inventories had a net decrease of P20 during the year, the cost of goods sold is P120.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3RE: Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of...

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Question

True or false

gross profit
rate based on cost is 20%, the
ending inventory is P30.
5. During the year, an entity had net purchases of P100. If
inventories had a net decrease of P20 during the year, the cost
of goods sold is P120.

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