On December 31, 2021, an entity experienced a decline in the value of inventory resulting in a writedown from P4,000,000 cost to P3,500,000 net realizable value. The entity used the allowance method to record the necessary adjustment. In 2022, market conditions have improved dramatically. On December 31, 2022, the inventory had a cost of P5,000,000 and net realizable value of P4,800,000. The entity made purchases of P20,000,000 in 2022. What amount should be reported as cost of goods sold in 2022? *

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...
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On December 31, 2021, an entity experienced a decline in the value of
inventory resulting in a writedown from P4,000,000 cost to P3,500,000
net realizable value. The entity used the allowance method to record the
necessary adjustment. In 2022, market conditions have improved
dramatically. On December 31, 2022, the inventory had a cost of
P5,000,000 and net realizable value of P4,800,000. The entity made
purchases of P20,000,000 in 2022. What amount should be reported as
cost of goods sold in 2022? *
a. 19,000,000
O b. 19,300,000
c. 18,700,000
O d. 24,000,000
Transcribed Image Text:On December 31, 2021, an entity experienced a decline in the value of inventory resulting in a writedown from P4,000,000 cost to P3,500,000 net realizable value. The entity used the allowance method to record the necessary adjustment. In 2022, market conditions have improved dramatically. On December 31, 2022, the inventory had a cost of P5,000,000 and net realizable value of P4,800,000. The entity made purchases of P20,000,000 in 2022. What amount should be reported as cost of goods sold in 2022? * a. 19,000,000 O b. 19,300,000 c. 18,700,000 O d. 24,000,000
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