2. The amount of purchase discounts lost to be recognized is *

a. 8,000

b. 0

c. 32,000

d. 40,000

3. The accounts payable balance should be reduced by *

a. 8,000

b. 80,000

c. 32,000

d. 40,000

4. The purchases account should be reduced by *

a. 32,000

b. 80,000

c. 40,000

d. 8,000

No. 2 to 4 MMD, Corp records its purchases at gross amounts but wishes to change to recording purchases net of purchase discounts. Discounts on purchases recorded from January 1, 2018 to December 31, 2018, totaled P80,000. Of this amount, P80,000 is still available in the accounts payable balance. The balances in MMD's accounts as of and for the year ended December 31, 2018, before conversion are: Purchases P4,000,000 Purchase Discounts 32,000 Accounts Payable 1,200,000