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The following information appears on the Kimchi Jjigae Company’s records for the year ended December 31: Inventory, January 1- P325,000; Purchases- P1,150,000; Purchase returns- P40,000; Freight-in- P30,000; Sales- P1,700,000; Sales returns- P25,000. On December 31, a physical inventory revealed that the ending inventory was only P210,000. Kimchi Jjigae’s gross profit on net sales has remained constant at 30% in recent years. Kimchi Jjigae suspects that some inventory may have been pilfered by one of the company’s employees. At December 31, what is the estimated cost of inventory? a. P292,500 b. P75,000 c. P210,000 d. P82,500

The following information appears on the Kimchi Jjigae Company’s records for the year ended December 31: Inventory, January 1- P325,000; Purchases- P1,150,000; Purchase returns- P40,000; Freight-in- P30,000; Sales- P1,700,000; Sales returns- P25,000. On December 31, a physical inventory revealed that the ending inventory was only P210,000. Kimchi Jjigae’s gross profit on net sales has remained constant at 30% in recent years. Kimchi Jjigae suspects that some inventory may have been pilfered by one of the company’s employees. At December 31, what is the estimated cost of inventory? a. P292,500 b. P75,000 c. P210,000 d. P82,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information appears on the Kimchi Jjigae Company’s records for the year ended December 31: Inventory, January 1- P325,000; Purchases- P1,150,000; Purchase returns- P40,000; Freight-in- P30,000; Sales- P1,700,000; Sales returns- P25,000. On December 31, a physical inventory revealed that the ending inventory was only P210,000. Kimchi Jjigae’s gross profit on net sales has remained constant at 30% in recent years. Kimchi Jjigae suspects that some inventory may have been pilfered by one of the company’s employees. At December 31, what is the estimated cost of inventory?

a. P292,500
b. P75,000
c. P210,000
d. P82,500
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